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 Ongoing tensions in Ukraine also sapped investors' appetite for
risk. Ukraine gave pro-Russian separatists a Monday morning deadline
to disarm or face a "full-scale anti-terrorist operation" by its
armed forces, raising the risk of a military confrontation with
Moscow.
European Union foreign ministers will hold talks later on Monday
about tougher sanctions against Russia.
Nikkei futures pointed to an early dip, with a stronger yen seen
undermining shares of exporters. S&P 500 e-mini futures were down
about 0.3 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.7
percent on Friday, pulling away from five-month highs hit on
Thursday.
U.S. stocks slid in a volatile session on Friday, with the Nasdaq
closing below the 4,000 mark for the first time since early February
as investors bailed out of high-flying technology and biotech
shares.
Ahead of that, Japanese shares tumbled to six-month lows, shedding
7.3 percent on the week, which was their biggest weekly fall since
devastating earthquake and tsunami in March 2011.
The low-yielding yen benefited from the heightened risk aversion.
The dollar was down about 0.2 percent in early trading at 101.46
yen, after touching a 3-1/2 week low of 101.32 yen on Friday, a far
cry from a 2-1/2 month high of 104.13 yen set on April 4.
The dollar index steadied, edging up to 79.603, though April 4's
seven-week high of 80.599 remained a distant memory after the
greenback's battering last week as U.S. stocks tumbled.
"Given the technical damage inflicted on the dollar and the decline
in U.S. interest rates, it is tempting to look for the greenback's
losses to accelerate," said Marc Chandler, global head of currency
strategy at Brown Brothers Harriman.
"We are more inclined to think that rather than breaking out, the
dollar simply moved to the lower end of its ranges. This means that
the greenback may do a bit better in the days ahead as participants
will likely be denied fresh incentives," he said in a note to
clients.
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The dollar got some help against the euro from European Central Bank
officials, whose comments rekindled speculation about more easing in
the euro zone.
The euro fell about 0.4 percent to 140.52 yen. Against the dollar,
it shed about 0.3 percent to $1.3843, moving away from a 3 1/2 week
peak of $1.3906 hit on Friday.
ECB President Mario Draghi on Saturday told a news conference that
"a further strengthening of the exchange rate would require further
stimulus.
The ECB is ready to make asset purchases if it deems them necessary
to counter a prolonged period of low inflation, ECB Executive Board
member Benoit Coeure said on Sunday.
European Central Banker Christian Noyer said on Monday in an
interview with daily newspaper Le Figaro that euro weakening was
desirable.
"The stronger the euro is, the more accommodative policy is needed,"
Noyer said.
Spot gold XAU= added about 0.6 percent to $1,327.10 an ounce, after
marking its second straight week of gains.
(Editing by Shri Navaratnam)
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