Japanese and Australian stock markets opened lower on Monday after a U.S. jobs report added to uncertainty about the U.S. Federal Reserve's pace of rate increases.

Japan's benchmark Nikkei was recently down 1.4% and Australia's S&P/ASX 200 fell 0.4%. Many markets in Asia are closed for the Lunar New Year holiday.

Friday's U.S. data showed slower job growth but decent wage inflation, which complicates the Fed's policy outlook. The pace of U.S. tightening has been a big concern since the Fed raised rates in December.

"The Fed's raising rates further in March isn't the main scenario, but that possibility is still left open," said Soichiro Monji, the general manager for economic research at Daiwa SB Investments.

Slowing growth in China, recent sharp falls in crude oil prices and the fallout for the energy industry and oil-producing countries have also been major concerns for investors recently.

After years of central bank stimulus, which helped boost stocks and commodities, the available path for the Fed may be narrow. The sharper pickup in wage growth might prompt the central bank to raise rates soon to cool economic activity, which tends to be negative for stock markets. On Friday, the U.S. dollar rose and short-term U.S. government bond yields gained, factoring in a higher probability of an additional rate rise.

Meanwhile, the Fed's too-cautious stance might be taken as a sign that the U.S. central bank is worried about the economic outlook, which would erode market confidence. Senior Fed officials suggested last week that slower overseas economies might drag on U.S. growth.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

February 07, 2016 20:45 ET (01:45 GMT)

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