Asian stocks, on Monday, have seen a collapse while the dollar has stayed firm after strong US jobs data fanned expectations that the US Federal Reserve may increase the interest rates earlier than previously thought.

Stock markets across Asia, including Japan's Nikkei, Australia, Malaysia and Indonesia have declined largely, with 1.2% drop in MSCI's broadest index of Asia-Pacific shares outside Japan.

European stock markets were also expected to do likewise, with financial spread betters expecting Britain's FTSE 100 to open down 0.5%, Germany's DAX off 0.5%, and France's CAC 40 to ease 0.4 %.

According to the US non-farm payrolls (NFP) data released on Friday, the unemployment rate has hit a 6-1/2-year low of 5.5% in February.

Although the wage gains were not much, the data still strengthened the expectations that the Fed might drop a reference to 'patience' on the timing of a rate hike at its next policy meeting on March 18, and will finally open the door for a June rate rise.

In a note, the analysts at Reorient Research said, "The spectre is that of a Fed hiking rates into an economic slowdown, and a higher dollar and higher real rates taking further steam out of the economy. Who should cheer that?”

Analysts at Mizuho Bank said that the job growth was still not smooth across sectors and the wage inflation was soft, thus the February job data was not an "unequivocally green light" for a June rate rise.

Mizuho said that the Fed will not jump the gun on this NFP read, and will prefer to wait, but Mizuho will not bet on unconditional patience indefinitely.

On Wall Street, the S&P500 Index, on Friday, showed a 1.4% decline to a three-week low and S&P futures got slightly weaker on Monday.

In Asia, the Australian and New Zealand dollars have hovered to near one-month lows.