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 MSCI's broadest index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> shed 0.6 percent, while Japan's Nikkei stock average
<.N225> added 0.1 percent, paring earlier gains.
"We are not out of the woods yet in terms of getting clarity on
which direction this market is going," said Stefan Worrall, director
of equity cash sales at Credit Suisse in Tokyo, noting the market
was not convincingly out of a potential correction phase.
China shares sank to a two-week low, dragging Hong Kong markets
down, as property and banking counters slipped on mainland news
reports that stoked fears banks have stopped extending loans to
property-related companies.
On Wall Street on Friday, stocks were off slightly on
options-related expirations.
The final weekend communiqué from the two-day meeting of G20 finance
ministers and central bankers in Sydney said they would increase
investment and employment, generating more than $2 trillion in
additional output over five years while creating tens of million of
new jobs, signaling optimism that the worst of crisis-era austerity
was past.
The communiqué acknowledged emerging nations' concerns that the
Federal Reserve consider the impact of its monetary stimulus
withdrawal, which has led to bouts of capital flight from some of
those markets.
However, minutes released last week from the Fed's most recent
meeting showed that policymakers generally "anticipated that the
economy would expand at a moderate pace in coming quarters,"
suggesting the pace of stimulus-tapering will continue for now.
"There was no realistic expectation that EM would get any relief but
they may be more vulnerable to bad news in the aftermath." said
Steven Englander, head of G10 currency FX strategy at CitiFX, in a
note to clients.
"Similarly the free pass to tapering may be mildly USD positive,"
Englander added.
The dollar edged up against a basket of currencies after posting its
first weekly gain in three weeks. The dollar index <.DXY> rose about
0.1 percent to 80.278, moving away from last week's low of 79.927
touched on Wednesday, which was its lowest since late last year
The dollar was steady on the day against its Japanese counterpart at
102.49 yen, not far from a three-week high of 102.82 yen hit on
Friday.
The euro drifted down about 0.1 percent to 140.74 yen, after
touching 141.26 yen on Friday, its loftiest level since January 24.
The yen is likely to remain under pressure on expectations of more
easing steps from the Bank of Japan.
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A Reuters poll last week showed the BOJ was expected to ease
monetary policy further by the summer, to give the economy a lift as
the effects of the government's stimulus begins to wane. Economists
surveyed remain skeptical that the central bank will achieve its 2
percent inflation target by early next year.
The euro was nearly flat on the day at $1.3736, not far from a
high of $1.3773 touched on Wednesday, its highest level since
January 2.
Also underpinning the single currency, unrest in the Ukraine reached
a climatic end over the weekend with parliament's vote on Saturday
to remove President Viktor Yanukovich, who abandoned his Kiev office
to protesters. The shift looks likely to pull Ukraine away from
Moscow's orbit and closer to Europe.
Investors await euro zone inflation on Friday to gauge whether the
European Central Bank has enough ammunition to ease monetary policy
at its next meeting on March 6.
"The weaker the data, the more the speculation will likely mount
that the ECB will take additional action," Marc Chandler, chief
global currency strategist with Brown Brothers Harriman, said in a
research note.
"The point is that between the data, ECB meeting and the U.S.
employment data on March 7, there is sufficient event risk to deter
strong euro gains from here," Chandler said.
On the commodities front, U.S. crude rose 0.3 percent to $102.52 a
barrel after posting a sixth straight week of gains, while Brent
crude added 0.2 percent to $110.05 a barrel.
But London copper fell sharply, shedding about 1.3 percent to
$7,065, on persistent fears about the impact of the Fed's tapering
as well as China's murky growth outlook.
Gold lost about 0.1 percent to $1,321.08 an ounce, after it marked a
third straight week of gains.
(Additional reporting by Tomo Uetake in
Tokyo; editing by Shri Navaratnam and Jacqueline Wong)
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