HONG KONG — Asian markets slipped Tuesday on renewed fears Greece will default on its debt obligations, but Shanghai rallied on fresh easing hopes after Chinese data showed inflation at its lowest level in more than five years.
Investors took their cue from New York and Europe as the new anti-austerity government in Athens refused to back down on demands to renegotiate its bailout, putting it on a collision course with its creditors.
Tokyo slipped 0.33%, or 59.25 points, to 17,652.68, Seoul shed 0.57%, or 11.14 points, to 1,935.86 and Sydney eased 0.25%, or 14.36 points, to 5,800.57.
Hong Kong was flat, edging up 7.10 points to 24,528.10 while Shanghai surged 1.5%, or 46.47 points, to 3,141.59.
Manila closed 0.76% lower, giving up 59.43 points to 7,723.14.
Greece's newly elected far-left leaders have pledged to stick to their demands for a renegotiation of the country's stringent bailout demands, which they describe as "toxic".
Ahead of a European Union summit Thursday, Prime Minister Alexis Tsipras and his Finance Minister Yanis Varoufakis are asking for bridging loans so they can come up with an austerity-free reform deal to run from Sept 1.
But European Commission chief Jean-Claude Juncker warned he did not expect any new deal to be reached at the meeting in Brussels, despite Tsipras saying he was "optimistic that we can reach a compromise".
German Chancellor Angela Merkel on Monday pressed Greece to present a "sustainable" finance plan, as Athens' insistence sparked fresh fears of a euro exit.
The euro managed to hold up, buying $1.1330 and 134.53 yen, compared with $1.1325 and 134.35 yen in New York
The dollar was at 118.74 yen against 118.64 yen.
Shanghai advanced on hopes for more monetary easing after data showed inflation in China had tumbled to 0.8% in January, well down from 1.5 percent in December and the lowest since November 2009.
The figures, which come despite an interest rate cut in November, are the latest to highlight problems in the world's number two economy and raise the spectre of possible deflation.
Mainland traders are hoping they will spur more easing measures by Beijing.
"The rising deflation risks require further monetary policy easing," Liu Li-Gang and Zhou Hao at Australia & New Zealand Banking Group wrote in a note before the data, according to Bloomberg News.
"We believe this is just a beginning of an effective policy easing cycle."