By Daniel Inman

HONG KONG (MarketWatch) -- Strong employment data from the U.S. helped Japanese and Australian stocks climb on Monday, though the latest chain of economic data from China weighed on sentiment, especially in Shanghai.

"The world's largest economy continues to recover, while the world's second-largest economy looks like it has run into a bit of a soft patch," said Matthew Sherwood, head of investment-market research at Perpetual in Sydney.

Chinese inflation jumped to 3.2% in February from 2% in January, the highest increase since April of last year. At the same time, the country's domestic economy showed some signs of weaker activity: slowing growth in industrial production and retail sales.

Inflation concern

Higher-than-expected inflation could raise concerns that Beijing will start monetary tightening.

It might be too early to call a serious slowdown in the Chinese recovery, as the latest data may have been affected by the Chinese New Year, a period often associated with sharply higher prices for food and other goods. The period occurred in January in 2012 and February in 2013.

Stocks in Mainland China fell on the back of the data, with the Shanghai Composite down 0.4% to 2,310.59. In Hong Kong, the Hang Seng Index ended the day down just one point at 23,090.82.

"The economic data wasn't very encouraging. Investors are still eyeing for more details on the local government's property-tightening measures, and they could weigh down on shares for a while," said Jacky Zheng, analyst at Capital Securities.

The latest economic data from China were offset by U.S. employment data released on Friday, which provided further signs of recovery in the world's largest economy. U.S. employers added 236,000 jobs in February, compared with economists' forecasts of 160,000.

Australia, Japan

Australian stocks closed higher, with the S&P/ASX up 0.5% to 5146.90. Mining stocks were lower, hurt by the Chinese data, while some local banks gained:

Rio Tinto ( RIO ) fell 2% and BHP Billiton ( BHP ) lost 0.8%, while National Australia Bank added 1.7% and Commonwealth Bank of Australia rose 0.4%.

The U.S. dollar rose sharply against the yen (USDJPY) on Friday and was steady at Y96.03 late in Asian trade on Monday.

Japanese stocks climbed amid a weaker yen, with the Nikkei up 0.5% to 12349.05. Shares in exporters benefited from the softer currency: Toyota Motor Corp. ( TM ) advanced 1.8% and Honda Motor Co. ( HMC ) was 2.6% higher.

Also in Japan, stocks in sectors sensitive to monetary easing -- such as the financial and real estate sectors -- continued to climb. Expectations for looser monetary policy were higher before the confirmation of the new Bank of Japan governor, with the change in leadership at the Bank of Japan expected to take place next week.

Sumitomo Mitsui Financial Group (SMFJY) rose 6.7% and Mitsubishi Estate Co. (MITEY) gained 1.5%.

South Korea's Kospi lost 0.1% to 2003.35, and Singapore's Strait Times Index was last up 0.2%.

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