Asian markets mostly fell on Monday following another retreat on Wall Street as a surge in US inflation to a record high ramped up concerns the Federal Reserve will be forced to tighten monetary policy sooner than later.

Reports that President Joe Biden was considering a fresh trade probe into China added to the downbeat mood and nullified the optimism sparked by news that he had held talks on Friday with Xi Jinping in a bid to smooth relations between the superpowers.

After driving a healthy run-up in Asia so far this month, investor sentiment was once again roiled by data on Friday showing US factory gate inflation had soared in August to an all-time high of 8.3 percent owing to a jump in demand as well as supply and labour shortages.

The reading ramped up speculation about the Fed's plans for monetary policy.

Its boss Jerome Powell has already indicated that the central bank will likely start tapering its vast bond-buying programme -- which has been a key driver of the economic and equity markets recovery -- by the end of the year.

But the latest figures could cause officials to bring forward their timeline. The release Tuesday of consumer inflation has now taken on more significance.

All three US indexes ended in the red on Friday, with reports of Biden's probe adding to the selling pressure.

The president was said to be looking at Beijing's subsidies and their effect on the US economy, the reports said, with discussions also being held on last year's trade deal agreed by Donald Trump.

"While initially markets traded positively on the hopes that a restart in high-level dialogue might eventually lead to a reduction in Chinese tariffs," news about the investigation "delivered the opposite outcome", said National Australia Bank's Rodrigo Catril.

"That said, it is unclear when the White House will announce the outcome of its review and as we know from the Trump era, any action against China is likely to come with retaliations."

Hong Kong led the losses, with tech firms again taking much of the heat on lingering concerns about China's crackdown on the sector, while Tokyo, Singapore, Seoul, Taipei, Manila and Jakarta were also down.

However, there were small gains in Sydney, Shanghai and Wellington.

"Risk assets will continue to struggle in the near term with weak hard data due to the Delta (coronavirus) outbreak and supply disruptions over the summer," Barclays strategists including Shinichiro Kadota said.

Traders are also keeping tabs on the Korean peninsula after the North test-fired a new "long-range cruise missile" over the weekend, calling it a "strategic weapon of great significance".

The US military described the move as posting "threats" to the country's neighbours and beyond.

Key figures around 0230 GMT 

Tokyo - Nikkei 225: DOWN 0.3 percent at 30,292.84 (break)

Hong Kong - Hang Seng Index: DOWN 1.7 percent at 25,756.48

Shanghai - Composite: UP 0.2 percent at 3,708.63

Dollar/yen: UP at 109.97 yen from 109.93 yen at 2100 GMT Friday

Pound/dollar: DOWN at $1.3831 from $1.3839

Euro/dollar: DOWN at $1.1804 from $1.1814

Euro/pound: DOWN at 85.32 pence from 85.34 pence

West Texas Intermediate: UP 0.6 percent at $70.15 per barrel

Brent North Sea crude: UP 0.6 percent at $73.33 per barrel

New York - Dow: DOWN 0.8 percent to 34,607.72 (close)

London - FTSE 100: UP 0.1 percent at 7,029.20 (close)