Tokyo’s Topix index fell as much as 1% after recording its biggest weekly gain in two years. South Korea’s equity benchmark also fell while mainland Chinese, Hong Kong and Australian shares inched higher — offering a mixed picture for the region.

The offshore yuan rose as the dollar weakened and China’s central bank set a stronger-than-expected daily reference rate. The gap between the yuan’s daily fixing versus estimates was the widest since November, while Bloomberg calculations indicated the People’s Bank of China injected a net 40 billion yuan ($5.56-billion) in open market operations.

Chinese Premier Li Qiang had earlier downplayed investor concerns of challenges facing the economy, saying Beijing was stepping up policy support to spur growth and systemic risks are being addressed.

“Just saying the risks are not as much as people think is not going to draw investors back,” says Vey-Sern Ling, managing director at Union Bancaire Privee. “China is not just a ‘show me’ story for investors, it’s a ‘show me a lot more than I expect’ story.”

Treasuries were mostly steady following a rally on Friday that wiped seven basis points from the 10-year yield. Australian and New Zealand bond yields ticked lower on Monday. 

Those moves come ahead of a busy week of economic data that will include the Federal Reserve’s preferred inflation gauge due on Friday. The core personal consumption expenditures index, which excludes food and energy costs, is seen rising 0.3% on the heels of its biggest monthly increase in a year.

Inflation readings are also due in Australia, France, Italy and Spain later this week, offering clarity on rising prices as investors begin to position for rate cuts.

US equity futures were little changed after a muted end to the week on Wall Street with the S&P 500 declining 0.1% and the Nasdaq index rising by the same margin on Friday.

The recent advances for the dollar reflect a shift in investor thinking about the world’s reserve currency. At the start of the year, many expected the dollar to weaken against its peers as the Fed edged closer to rate cuts. Now, the prospect that other developed market central banks will also cut has rekindled the currency’s appeal.

“Tightening usually causes recessions when it triggers financial crises that turn into credit crunches,” said Ed Yardeni, president of his eponymous research firm, said in a Monday note. “That sequence of events is unlikely now,” he said, citing the Fed’s use of emergency liquidity measures to address crises, such as the stress in the US banking system in March last year.

Forecasts for Fed cuts have spurred renewed interest in the so-called bond steepener trade, where investors load up on short-dated US bonds that offer attractive short-term price appreciation as rates fall.

In commodities, oil advanced after a three-day drop on signs of a tightening market driven by sanctions, geopolitical risks, and OPEC+ supply cuts. Gold edged higher, extending a weekly gain