Rising oil prices and anticipation that China might tighten monetary policy yet again to combat inflation kept Asian stock markets in check on Monday.
Oil prices rose to near $113 a barrel after Libyan rebels in control of key oil producing areas in the OPEC nation said they won't produce crude for at least a month as they repair fields damaged in fighting. In currencies, the dollar was up against the yen but lower against the euro.
Wall Street was headed for a higher opening Monday, with Dow Jones industrial futures up 27 points to 12,461 and S&P 500 futures higher by 3.9 points to 1,334.90. Markets in Europe were closed for the Easter holiday.
Japan's Nikkei 225 index closed 0.1 percent lower at 9,671.96, after vacillating between positive and negative territory throughout the day. Toyota Motor Corp., the world's No. 1 auto producer, closed down 0.6 percent after the company announced its car production in Japan plummeted nearly 63 percent in March.
Japan's powerhouse auto industry has struggled to regain its footing since an earthquake on March 11. The quake spawned a huge tsunami that crashed into the country's northeastern coast, home to a vast network of auto parts suppliers. Those smaller companies were wiped out, leaving Toyota and many other Japanese industry behemoths scrambling for alternatives.
Japan has now begun to turn its attention to reconstruction, with the government proposing last week a special $50 billion budget to help finance reconstruction efforts and plans to build 100,000 temporary homes for survivors. That helped lift shares of companies expected to play a major role in the rebuilding effort. Mitsubishi Heavy Industries Ltd. rose 1 percent, and leading equipment maker Komatsu Ltd. rose 0.4 percent.
South Korea's Kospi rose 0.8 percent to 2,216, with a Yonhap news report Monday showing the volume of cargo handled at South Korea seaports grew more than 7 percent during the first quarter of 2011, fueled by improving economic and trade conditions. Hyundai Heavy Industries Co., South Korea's leading shipbuilder, rose 3.7 percent.
Markets in Australia, New Zealand and Hong Kong remained closed Monday.
Mainland Chinese stocks fell Monday to their lowest close in three weeks ahead of new initial public offerings. Investors are also watching for further moves by the authorities to cool inflation. The Shanghai Composite Index slipped 1.5 percent to 2,964.95 while the Shenzhen Composite Index fell 2 percent to 1,249.58.
"Although the adjustment might last two or three days, the upward trend in stocks will not be changed," said Peng Yunliang, a Shanghai-based analyst.
Expectations of further moves to cool housing prices pulled shares in Poly Real Estate Group 2 percent lower.
News reports on Sunday quoted China's national planning agency as saying inflation will be about 5 percent in the second quarter. Inflation is regarded as a chief threat to the global economic recovery, and central banks were expected to use the means at their disposal to try to tame it. That could reduce the liquidity that has been supporting share prices.
"Inflation is going to play a very big role," said Tey Tze Ming, a trader at Saxo Capital Markets in Singapore. Central banks in emerging markets "will be forced to increase borrowing costs."
China's central bank has raised the reserve requirement ratio for commercial banks four times and benchmark interest rates twice since the beginning of this year to mop up excess liquidity.
Benchmark crude for June delivery was up 55 cents at $112.84 a barrel in electronic trading on the New York Mercantile Exchange. Oil markets were closed Friday for the Easter holiday. The June contract last settled up 84 cents at $112.29 on Thursday.
The dollar strengthened to 82.03 yen from 81.90 yen late Friday in New York. The euro rose to $1.4583 from $1.4550. It had risen to a 16-month high of $1.4648 during Thursday's trading.