Asia Subdued After Soft US Jobs Data, Crude Oil Soars

Asian stocks were subdued early on Monday after a disappointing U.S. jobs report raised questions about the underlying strength of the world's biggest economy, while crude oil prices soared on supply woes stemming from wildfires in Canada.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.15 percent. Australian stocks and South Korea's Kospi shed 0.2 percent each.

Japan's Nikkei bucked the trend and rose 1 percent as the yen's recent surge appeared to halt for now.

U.S. shares posted modest gains on Friday, mainly as the weaker-than-expected U.S. jobs report fanned expectations that the Federal Reserve would have to hike interest rates at a very slow pace. The Dow gained 0.4 percent and the S&P 500 edged up 0.3 percent on Friday.

U.S. nonfarm payrolls increased by 160,000 in April, the smallest gain since September, and below the 200,000 economists had expected. It prompted some financial institutions to lower their expectations of an interest rate hike for this year to just one from two before the report.

The dollar was up 0.2 percent at 107.36 yen. The U.S. currency initially fell in reaction to the lackluster jobs report on Friday but bounced after New York Federal Reserve President William Dudley said two rate hikes this year were still a "reasonable expectation."

The dollar still remained within reach of an 18-month low of 105.55 yen plumbed last week.

"The market now sees one rate hike in December, and none next year. Some may still expect a hike in June but that probability has fallen as the rise in U.S. prices are slowing," wrote Junichi Makino, an economist at SMBC Nikko Securities.

"This shows that the Fed's policies cannot be counted on to reverse recent yen appreciation. If the Bank of Japan wants to weaken the yen, it will have to do it through its own policies."

The euro was down 0.2 percent at $1.1384, its lowest since April 29.

The Australian dollar was flat at $0.7370 after sliding more than 1 percent on Friday after the country's central bank slashed its inflation forecasts.

U.S. crudewas up 2.4 percent at $45.74 a barrel and Brent crude rose 1.8 percent to $46.22 a barrel as a wildfire raged through Canada's oil sands region, shutting half of the country's vast oil sands capacity.

The oil market was also pondering weekend news of Saudi Arabia's appointment of a new energy minister to take over from veteran oil minister Ali al-Naimi. The new appointee, Khalid al-Falih, is a believer in reform and low oil prices.