Asian share markets slid on Monday as fresh U.S.-Iran fighting lifted oil prices and kept bond yields elevated on inflation concerns. Brent crude climbed 2.8 per cent to $90.60 a barrel after U.S. forces struck Iranian launchers on Larak island on Sunday; Iran responded by attacking U.S. forces in Jordan, according to Fox News. President Trump posted that Iran's main oil terminal at Kharg Island was being "blown to smithereens," though the military provided no confirmation.

Market pricing for a U.S. rate rise in September jumped to 57 per cent after Federal Reserve Chair Kevin Warsh emphasised on Friday the central bank had work to do controlling inflation. Japan's Nikkei fell 1.6 per cent, South Korean stocks dropped 2.2 per cent, and MSCI's Asia-Pacific index outside Japan lost 1.2 per cent. Chinese blue chips eased 0.7 per cent as manufacturing activity remained subdued.

"We continue to expect that a hike won't come until December, though agree that the September meeting is live," said Michael Feroli, chief U.S. economist at JPMorgan. The outcome of Friday's August payrolls report and consumer price data on September 11 will be key to the timing of any rate move, Channel NewsAsia business reports.