Asian stocks edged up on Monday, with investors taking profits on defensive plays and buying back other beaten down shares, though selling could resume shortly as the U.S. and Chinese economies are slowing in tandem.

The U.S. labor market shrank in June for the first time this year, adding to fears of a sharp global slowdown in the second half, especially with Chinese manufacturing activity shifting down and property prices at risk of falling.

Double-dip fears are the pervading influence on market psychology at present even as European sovereign concerns appear to be easing, said Mitul Kotecha, global head of foreign exchange strategy at Credit Agricole CIB in Hong Kong.

Financial markets reflect a big decrease in risk taking as a result of perceptions of the global economy. World stocks have fallen 13.1 percent in the last two months <.MIWD00000PUS>, the Australian dollar slid 8.7 percent and emerging market bond yields have risen around 75 basis points over U.S. Treasuries.

This week the focus will be squarely on how central banks will address signs of a coming global slowdown, with the European Central Bank and the Bank of England both holding policy meetings and the Reserve Bank of Australia and Bank of Korea meeting as well.

Japan's Nikkei share average <.N225> rose 0.4 percent, though remained within spitting distance of a seven-month low hit last Thursday.

After falling 5.5 percent last week, some short-term indicators pointed to oversold conditions, but incoming economic reports could dictate where the market heads next.

We're seeing a bit of short-covering now that we're past the jobs data, but the market is going to want to see a lot of the other indicators coming up this week, including those linked to consumer spending, said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.

The MSCI index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> was up 0.2 percent, though gains in resources and technology shares were mostly offset by declines in consumer staples, financials and telecom stocks.

Mainland Chinese stocks were Asia's biggest decliners. The Shanghai composite <.SSEC> was down 1 percent, bringing year-to-date losses to 28 percent.

China's fourth-largest lender Bank of China <601988.SS> saw its shares drop 1.8 percent, the second biggest drag on the composite index, after the firm raised $8.8 billion in a rights issue over the weekend.

The company's shares were down 2.3 percent in Hong Kong <3988.HK> and the heaviest drag on the Hang Seng index, which was down 0.2 percent <.HSI>.

U.S. markets will be closed for a public holiday, probably keeping trading volumes light for the rest of the global session.

In currency markets, the euro edged down 0.2 percent to $1.2535, gaining only by virtue of the dollar's losses in the wake of the June U.S. employment report.

Short-term investors in the International Monetary Market cut their net long dollar position by $2.7 billion to $9.5 billion in the week ended June 29. The decrease in long dollar positioning coincided with poor U.S. housing data and slowing in factory activity.

U.S. crude futures rose 0.7 percent to $72.66 a barrel after bargain hunters emerged with oil closer to $72.

Indeed, oil prices fell 8.3 percent last week compared with a 3.9 percent fall in world equity prices, so rebalancing of portfolios is inevitable.

(Additional reporting by Elaine Lies in TOKYO; Editing by Jan Dahinten)

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