© Reuters.

By Zhang Mengying

Investing.com – Asia Pacific stocks were down on Monday morning over a gloomy economic outlook.

Japan’s fell 0.62% by 10:46 PM ET (2:46 AM GMT).

South Korea’s gained 0.37%.

In Australia, the inched down 0.09%.

Hong Kong’s was down 0.68%.

China’s was down 0.28% while the fell 0.50%.

slipped 0.93% and dived 1.77% last Friday, as a survey showed business activity contracting for the first time in nearly two years amid red hot inflation and rising interest rates.

The U.S. 10-year yield was at about 2.79%, paring a little of last week’s drop. Investors are expecting that the slower economic expansion could help to moderate high inflation and soften the monetary tightening.

A dollar gauge climbed, and oil hovered around $95 a barrel, reflecting a generally cautious mood in markets.

Investors are now waiting for this week’s policy decision from the U.S. Federal Reserve, as well as earnings from Google’s Alphabet (NASDAQ:) Inc. And technology titan Apple Inc (NASDAQ:)., which will help to clarify the out economic outlook.

“We still see further downside for risky assets as recession fears accumulate and central banks remain committed to fighting inflation at the expense of growth,” Standard Chartered (OTC:) Bank Plc chief strategist Eric Robertsen said in a note.

Markets are priced for a 75 basis-point rate hike from the Fed, with about a 9% chance of a full one-percentage-point increase.

U.S. Treasury Secretary Janet Yellen said she doesn’t see any sign that the U.S. economy is in a broad recession.

In Asia Pacific, investors are awaiting progress in a potential restructuring plan for China Evergrande Group as the world’s most indebted developer has previously said it would deliver a preliminary plan by the end of July.

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