SYDNEY- Share markets turned hesitant in Asia on Monday as strife in the Middle East offset more policy measures in China, while the Nikkei dived on concerns Japan’s new prime minister favored normalizing interest rates.

The stimulus rush in China did help outweigh a poor manufacturing survey and lift the blue-chip another 7.7 percent, having already jumped 16 percent last week. The Shanghai Composite climbed 7.1 percent, on top of last week’s 13 percent rally.

Continued Israeli strikes across Lebanon added geopolitical uncertainty to the mix, though oil prices were still restrained by the risk of increased supply.

The week is packed with major US economic data including a payrolls report that could decide whether the Federal Reserve delivers another outsized rate cut in November.

The Nikkei led the early action with a dive of 4.6 percent as investors anxiously waited for more direction from new Prime Minister Shigeru Ishiba, who has been critical of the Bank of Japan’s easy policies in the past.

However, he sounded more conciliatory over the weekend saying monetary policy “must remain accommodative” given the state of the economy.

That helped the dollar hold around 142.10 yen after sliding 1.8 percent on Friday from a 146.49 top.

“Ishiba has endorsed the BoJ’s intention to normalize monetary policy, albeit leaving it uncertain as to the pace and timing,” said HSBC economist Jun Takazawa.

“If additional stimulus measures are realized, this would also likely buttress the recovering trend in spending, thereby strengthening the BoJ’s conviction to raise interest rates at a gradual pace,” he added. “All in all, we continue to see a constructive outlook for Japan.”

In China, the central bank said it would tell banks to lower mortgage rates for existing home loans by the end of October, likely by 50 basis points on average.

That follows a barrage of monetary, fiscal and liquidity support measures announced last week in Beijing’s biggest stimulus package since the pandemic.

“We believe deflation risks are now being taken more seriously,” said Christian Keller, head of economic research at Barclays. “At the same time, the Politburo suggests a consensus has likely been reached in Beijing that fiscal stimulus and central government leverage are necessary to arrest the downturn.”