TOKYO (AP) — Asian shares were mostly lower Tuesday in quiet trading after U.S. markets were closed for Presidents Day.

Shares dropped in Tokyo, Sydney and Hong Kong but rose in Seoul and Shanghai. Analysts say worries about a slowdown and weakening demand persist in Asia, as companies cope with rising energy and raw material costs and consumers hold back on spending.

In Japan, a preliminary manufacturing indicator, the flash purchasing manager’s index, fell to 47.4 in February from 48.9 the month before. That was the weakest reading in more than two years.

The latest data from Australia, called the Judo Bank PMI, showed private sector activity remained in contraction for the fifth straight month. Although exports rebounded with help from China’s re-opening after it dropped COVID-related restrictions, the sector showed little to no positive momentum. Unemployment has also risen in Australia.

“The distortions in the Australian economy remain extreme and point only to recession,” Clifford Bennett, chief economist at ACY Securities, said in a commentary.

Tokyo’s benchmark, the Nikkei 225, shed 0.3% in morning trading to 27,461.38. Australia’s S&P/ASX 200 slipped 0.5% to 7,316.00. South Korea’s gained 0.1% to 2,457.83. Hong Kong’s Hang Seng dipped 0.6% to 20,768.85, while the Shanghai Composite advanced 0.5% to 3,305.86.

Analysts said worries about a slowdown and weakening demand persist as companies cope with rising energy and raw material costs and consumers hold back on spending.

“Regional weakness also appears to reflect skepticism about the likely strength of China’s recovery, based on the recent underperformance of Chinese equities,” said Stephen Innes, managing partner at SPI Asset Management.

It was unclear if newly issued rules on overseas initial public offerings by Chinese companies had any significant impact on trading.

China cleared the way for more companies to join foreign stock exchanges but issued rules that might make the stock offering process more time-consuming by requiring stricter regulatory scrutiny in advance.

This week will bring updates on U.S. manufacturing and housing and minutes from the last meeting of the Federal Reserve that might provide insights into the outlook for inflation and interest rates.

On Friday on Wall Street, the S&P fell 0.3% and the Dow Jones Industrial Average rose 0.4%. The Nasdaq composite fell 0.6%.

In energy trading, benchmark U.S. crude added 15 cents to $76.70 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international pricing standard, lost 84 cents to $83.23 a barrel.

In currency trading, the U.S. dollar inched up to 134.44 Japanese yen from 134.26 yen. The euro cost $1.0664, down from $1.0689.

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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama