Asian markets mostly fell on Monday as investors set their sights on the release of key US inflation data due at the end of the week.

After last week's Federal Reserve projections for interest rates indicated it would cut three times this year, traders are optimistic about the outlook for equities.

However, figures showing the US economy remains in rude health are keeping a lid on sentiment and raised concerns that the central bank might not be able to bring borrowing costs down as quickly as hoped.

Those concerns were echoed by Atlanta Fed chief Raphael Bostic on Friday, when he said he saw inflation remaining sticky and saw just one rate cut this year, instead of the two he had previously foreseen.

Eyes are now on the release of the personal consumption expenditures (PCE) index, the Fed's preferred gauge of inflation, with traders hoping for a reading that shows price gains slowing further.

The report follows recent data on consumer and producer prices, which came in higher than forecasts.

Still, Stephen Innes at SPI Asset Management said: "Investors have shifted their focus away from the exact number of rate cuts the Fed will implement this year or the timing thereof.

"What matters more is the clear signal that the trajectory of policy rates is downward, not upward, from here."

Hong Kong, Tokyo, Shanghai, Seoul, Singapore, Taipei, Manila, Jakarta and Bangkok all fell, though there were gains in Sydney and Wellington.

The stuttering start to the week came after the Nasdaq chalked up a record for the third straight day.

There was little reaction to Chinese Premier Li Qiang's comments downplaying worries about the world's number two economy and pledges of more support to kickstart growth.

The remarks come as leaders struggle to reinvigorate growth engines but refuse to unveil any bazooka-like stimulus measures.

"Just saying the risks are not as much as people think is not going to draw investors back," Vey-Sern Ling at Union Bancaire Privee said.

"China is not just a 'show me' story for investors, it's a 'show me a lot more than I expect' story."

On currency markets, the yen strengthened after Japan's top currency official Masato Kanda said he was ready to support the unit against excessive moves.

He said the recent softness "is not in line with fundamentals and is clearly driven by speculation", adding that "we will take appropriate action against excessive fluctuations, without ruling out any options".

Key figures around 0700 GMT

Tokyo - Nikkei 225: DOWN 1.2 percent at 40,414.12 (close)

Hong Kong - Hang Seng Index: DOWN 0.1 percent at 16,477.31 

Shanghai - Composite: DOWN 0.7 percent at 3,026.31 (close)

Dollar/yen: DOWN at 151.23 yen from 151.40 yen on Friday

Pound/dollar: UP at $1.2605 from $1.2601

Euro/dollar: UP at $1.0818 from $1.0812

Euro/pound: UP at 85.81 pence from 85.77 pence 

West Texas Intermediate: UP 0.6 percent at $81.08 per barrel

Brent North Sea Crude: UP 0.5 percent at $85.24 per barrel

New York - Dow: DOWN 0.8 percent at 39,475.90 (close)

London - FTSE 100: UP 0.6 percent at 7,930.92 (close)