* Hong Kong leads Asia lower as Evergrande woes mount
* Inflation and supply disruptions weigh on growth hopes
* Yuan lower as traders look to USTR Tai's speech
* Oil looks to OPEC+ meeting
* European stocks seen up slightly
TOKYO, Oct 4 (Reuters) - Asian shares dipped on Monday as
concerns about China's property sector and inflation worries
offset upbeat U.S. data and positive news on new drugs to fight
Trading in shares of debt-laden China Evergrande
was suspended pending an announcement about a major transaction.
That comes a few days after the distressed developer missed a
key interest payment on its offshore debt obligation for the
Chinese media reported on Monday Evergrande will sell a
half-stake in its property management unit for more than $5
billion, however, that news did little to sooth sentiment.
"The biggest problem is not a default by Evergrande but the
environment that has led to its downfall. Authorities are
regulating housing loans and lending to property firms. Markets
are looking for a next Evergrande already," said Kazutaka Kubo,
senior economist at Okasan Securities.
"There is rising risk Evergrande's woes will spread to the
entire Chinese property sector."
MSCI's broadest index of Asia-Pacific shares outside Japan
Hong Kong's Hang Seng index dropped as much as 2.7%
to edge near its one-year low touched last month while Japan's
Nikkei stood 1.1% lower at one-month lows.
Chinese mainland markets will be closed until Thursday for
the National Day holiday while South Korean markets were also
shut on Monday.
European shares are expected to rise slightly in a catch-up
to a late Wall Street rally on Friday, with Euro Stoxx futures
and Britain's FTSE futures trading 0.3-0.4%
Investor sentiment got a lift after Merck & Co said
an experimental oral antiviral treatment could halve the chances
of dying or being hospitalised for those most at risk of
contracting severe COVID-19.
A host of U.S. economic data released on Friday also showed
increased consumer spending and accelerated factory activity
though lofty inflation kept alive worries central banks may need
to raise interest rates sooner than currently expected.
Euro zone inflation also hit a 13-year high last month and
looks likely to jump higher still.
Investors fear global inflation could persist for longer
than expected, given a continued rise in commodity prices and
ongoing supply disruptions in many parts of the world, despite
Federal Reserve Chair Jerome Powell's insistence that high
inflation is transitory.
The core U.S. PCE price index, the Federal Reserve's
preferred inflation measure for its flexible 2% target,
increased 3.6% in August from a year earlier, its biggest rise
in three decades and matching July's gain.
"Although Powell has stuck to his script that inflation will
be transitory, he is also recently starting to hedge his
comments too, leading investors to suspect he, too, is worried
about inflation," said Norihiro Fujito, chief investment
strategist at Mitsubishi UFJ Morgan Stanley Securities.
While speculation about earlier Fed policy tightening
boosted U.S. bond yields last week, yields have pulled away from
last week's multi-month peaks for now.
The 10-year U.S. Treasury yield stood at 1.472%,
off Tuesday's three-month high of 1.567%.
Lower U.S. yields also weighed on the dollar with the euro
bouncing back to $1.1591, off Thursday's 14-month low of
The U.S. currency dipped to 111.03 yen, staying below
Thursday's 1-1/2-year high of 112.08 yen.
The offshore Chinese yuan dipped 0.2% to 6.4499 per dollar
ahead of U.S. Trade Representative Katherine Tai's speech
unveiling the Biden administration's strategy for the troubled
U.S.-China trade relationship.
Biden administration officials say China has not met its
Phase 1 trade deal obligations and that they intend to hold it
to its commitments.
Oil prices remained elevated, with Brent futures staying
just shy of a three-year peak hit late last month, on
expectations oil producing countries will raise supply in a
steady manner when they meet on Monday.
Brent futures traded at $79.04 per barrel, down
(Editing by Ana Nicolaci da Costa and Sam Holmes)