(Reuters) - A look at the day ahead in Asian markets.

Strong U.S. manufacturing data on Monday ensured the second quarter of the year started with a bang in perhaps the two most important financial assets in the world - the dollar and U.S. Treasuries - which should set the tone for Asia on Tuesday. 

Bond yields jumped and the dollar spiked to its highest level since November as the 'higher for longer' Fed and U.S. economic 'soft landing' narratives tightened their grip on fixed income and currency markets.

Curiously though, Wall Street held up reasonably well - the Dow fell 0.6% but the S&P 500 only shed 0.2% and the Nasdaq closed in the green. Just. 

Could this resilience offset higher yields and a stronger dollar, and support risk appetite in Asia?

If not, a disappointing raft of Asian factory activity figures on Monday will be cited, along with the dollar's ascent. 

The greenback has built up a head of steam, breaking above 105.00 on an index basis for the first time this year and pushing the yen toward 152.00 per dollar back into potential Japanese intervention territory.

It looks like the dollar has momentum too, having weakened in only two of the last 13 sessions. U.S. futures market data show that hedge funds have amassed their biggest net long dollar position since September 2022, most of which is against the yen.

Monday's batch of Japanese economic indicators gave off mixed signals, and so offered the yen no clear path. But the U.S. ISM activity data and another uptick in the Atlanta Fed's GDPNow model estimate for Q2 growth certainly did. 

Chinese markets started the week on the front foot, however, after a private survey showed Chinese manufacturing activity expanded at the fastest pace in 13 months in March, reinforcing surprisingly strong official survey data over the weekend.

Mainland Chinese blue chips rose 1.6% for their best day in a month, easily outperforming the MSCI Asia ex-Japan index which ended slightly lower, and Japan's Nikkei which lost 1.4%.

Asia's economic and corporate calendar on Tuesday is fairly light. The latest Australian and Indian manufacturing purchasing managers index reports and South Korean consumer inflation are the pick of the bunch.

Economists polled by Reuters reckon monthly inflation in Asia's fourth-largest economy slowed in March to 0.3% from 0.5%, and the annual rate held steady at 3.10%.

With inflation running well above the Bank of Korea's 2% target, interest rates are likely to be kept at their 15-year high of 3.5% well into the second half of the year. Like many central banks in Asia, the BOK will probably for the Fed to ease U.S. monetary policy before moving.

Here are key developments that could provide more direction to markets on Tuesday:

- Australia manufacturing PMI (March)

- India manufacturing PMI (March)

- South Korea consumer inflation (March)