Asian shares and the dollar edged lower on Monday as investors awaited central bank meetings in the United States and Japan this week that are expected to hold clues to future policy moves.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2 percent in early trading, taking its cue from a mixed day on Wall Street on Friday.
Markets in Australia were closed for Anzac Day, a public holiday.
Japan's Nikkei stock index shed about 0.5 percent as the yen pulled off its lows. Investors also locked in gains after the index soared to an 11 1/2-week high following a report the Bank of Japan will consider another easing step at its two-day policy review that ends on Wednesday.
Bloomberg reported on Friday that the Bank of Japan is considering applying negative rates to its lending program for financial institutions.
But some investors still believe the central bank might opt to hold steady as it assesses the impact of its negative interest rate policy unveiled on Jan. 29. A semi-annual report on the country's banking system issued on Friday by the central bank said the policy has caused some disruption in fund flows and will hurt financial institutions' profits for the time being.
Underpinning sentiment, Prime Minister Shinzo Abe ordered his government on Sunday to compile an extra budget package to fund reconstruction from recent earthquakes that hit Kumamoto prefecture in southwestern Japan, with an aim to put it into effect by June 1.
Against the yen, the dollar slipped about 0.4 percent to 111.41 yen after it earlier rose as high as 111.90, its loftiest peak since April 1.
"The wide interest rate differential between the U.S. and Japan make it costly to be long yen without momentum," Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York, said in a note to clients.
"Momentum and trend followers appear heavily represented in the futures market, and they have been caught the wrong way. This may see the tone shift from selling dollar rallies to buy dips," Chandler said.
The euro added about 0.1 percent to $1.1231. Last week the European Central Bank held its policy rates at historic lows as expected.
The Fed, which lifted its benchmark overnight interest rate in December for the first time in nearly a decade, meets on Wednesday.
Policymakers are expected to hold interest rates steady when they meet this week, but may tweak their description of the economic outlook to reflect more benign conditions, leaving the path open for future rate rises.
A Reuters poll on Friday showed that economists expect the Fed to stand pat and then deliver a rate hike in June, and follow up with another by the end of this year.
Crude oil prices slipped after rising on Friday and notching their third straight week of gains as market sentiment turned more upbeat amid signs a persistent global supply glut may be easing.
Brent fell about 0.7 percent to $44.79 a barrel, while U.S. crude shed about 0.9 percent to $43.36.