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(Refiles to fix payrolls report story link in paragraph 1)
By Wayne Cole
SYDNEY (Reuters) -Asian shares slipped on Monday while the dollar held near 14-month peaks after an unambiguously strong payrolls report shoved up bond yields and tested lofty equity valuations just as the earnings season gets under way.
The impact of the jobs report on U.S. rate cut prospects also raised the stakes for consumer price figures on Wednesday where any rise in the core greater than the forecast 0.2% would threaten to close the door on easing altogether.
Not helping, was a spike in oil prices to four-month highs amid signs of weaker crude shipments from Russia as Washington stepped up sanctions on the country.
Markets have already scaled back expectations for Federal Reserve rate cuts to just 27 basis points for all of 2025, with the terminal level now seen around 4.0% compared to the 3.0% many had hoped for this time last year.
"Given such strong data, we now expect the Fed to cut rates only once this year, by 25bp in June," said Christian Keller, head of economic research at Barclays.
"We still expect the FOMC to proceed with a cut in June, as we expect the economy to slow in coming quarters and inflation to continue to decline in H1, before tariffs lead to some firming in inflation in H2."
At least five Fed officials are on the docket to speak this week and offer their reaction to the jobs surprise, with the influential Federal Reserve Bank of New York President John Williams appearing on Wednesday.
The hawkish turn on rates lifted yields on 10-year Treasuries to 14-month peaks of 4.79%, and they were last trading at 4.764% in Asia.
Higher yields on risk free bonds raise the discounting bar for corporate earnings and make debt relatively more attractive compared to equities, cash, property and commodities.
They also raise borrowing costs for businesses and consumers, and that is before President-elect Donald Trump's proposed tariffs inflate import prices.
This could test the optimism around corporate earnings as the season kicks off with the major banks on Wednesday, including Citigroup, Goldman Sachs and JPMorgan.
BEARS EYE STERLING
A holiday in Japan made for thin early trading on Monday and MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.4%.
While the Nikkei was shut, futures traded down at 38,770 compared to a cash close of 39,190.
South Korean stocks eased 0.2%, with the political situation still in flux as a Constitutional Court hearing begin on Tuesday to decide if impeached president, Yoon Suk Yeol, will be removed from office or reinstated.