Asian stocks inched higher on Tuesday, despite data that bolstered market concerns that the global economic recovery may be more fragile than anticipated and inflationary pressures continuing to mount.
MSCI's broadest index of Asia-Pacific equities outside Japan climbed 0.84 percent on Tuesday but is still down 6.7% for the month thus far. The previous session concluded with slight losses for U.S. equities.
In early trading, the Nikkei was unchanged in Tokyo, while Australia's S&P/ASX200 index rose 0.34 percent.
Hong Kong's Hang Seng Index increased 1.2%, while mainland China's CSI300 Index increased 0.7%.
In Asian trade, the U.S. dollar index, which measures the greenback relative to a basket of currencies of other major trading partners, was unchanged at 104.1.
As a result of sluggish retail sales and factory production in China and disappointing U.S. manufacturing data, economic growth concerns have resurfaced in the world's two largest economies.
Investors are also evaluating the global inflationary impact of China's lockdowns to tackle the coronavirus, which has halted manufacturing production in some areas of the country.
"China's restrictions could have a significant impact on the rest of the world through their effect on inflation. Inflation, and the central bank's response to it, has been a significant headwind for global bond and stock markets this year "Capital Economics wrote to investors in a note.
On Tuesday, the gains in Asian markets follow a predominantly lower U.S. session on Monday.
The S&P 500 fell 0.4% while the Nasdaq Composite fell 1.2% to 11,664 points.
The increase in the Dow Jones index was only 0.08 percent.
ANZ strategists wrote in a research report, "Risk markets were weighed down by concerns over deteriorating global growth prospects,"
"Hugely disappointing Chinese statistics for April and the precipitous decline in the U.S. Empire State manufacturing index sparked concerns that economic activity may be experiencing a sudden loss of momentum as supply-chain disruptions intensify. The data profile implies that supply constraints due to China's zero-COVID policy are the primary factors."
The Empire State manufacturing index of the New York Fed, which was released on Monday, indicated a sharp decline in May, and shipments fell at the fastest rate since the beginning of the pandemic.
The yield on benchmark 10-year Treasury notes jumped to 2.8931 percent in early Asian trading, up from Monday's U.S. finish of 2.879 percent.
The two-year yield, which increases as traders anticipate higher Fed fund rates, reached 2.578 percent compared to the U.S. closing yield of 2.568 percent.
"Markets currently price the Fed funds rate to be 53 basis points higher at the next meeting in June, and 200 basis points higher by year end," explained Imre Speizer, head of New Zealand strategy at Westpac.
To 129.24, the dollar appreciated 0.06 percent against the yen. It is approaching its high for the year 131.34.
The European single currency rose 0.1% on the day to $1.0437 after falling 0.99% in the previous month.
U.S. crude lost 0.18 percent to $113.99 a barrel. Brent crude was somewhat more expensive at $114.40 per barrel.
Gold was marginally significant spot price of gold was $1,826.7072 per ounce.