Asian stock markets mostly fell on Monday following a steep slide on Wall Street, but investors bought some Japanese exporters such as Canon Inc. on the back of a downtrodden yen.
Demand for high-yielding currencies kept the yen pinned near an all-time low versus the euro and a 4-1/2-year low against the dollar. The Bank of Japan, unlike other central banks, was seen in no hurry to raise interest rates.
Oil prices slid below $71 a barrel following an end to a strike in Nigeria that had threatened to disrupt oil exports, while gold took a breather after rising in New York.
Key Tokyo platinum futures rose to a record above 5,100 yen a gram, bolstered by growing supply concerns.
By the end of the morning session, Tokyo's Nikkei average had fallen 0.5 percent led by property plays such as Sumitomo Realty & Development and Mitsubishi Estate, which were hurt by drops in real estate investment trusts (REITs).
Concerns about higher interest rates and subprime mortgage problems in the United States appear to have prompted foreign brokerages to sell REIT, including short-selling, said Hiroaki Kuramochi, a managing director at Bear Stearns.
But the softer yen is helping issues sensitive to the currency and the Nikkei might briefly swing into positive territory at some point, Kuramochi added.
Canon rose 0.3 percent, while chip-tester maker Advantest Corp. (6857.T: Quote, Profile, Research) added 1.6 percent. Chip-related stocks were further propped up by optimism of a turnaround in the sector's earnings.
Japan's Elpida Memory added 1.1 percent, the world's top contract chip maker TSMC climbed 1.0 percent and South Korea's Samsung Electronics put on 0.3 percent after reversing early losses.
The MSCI index of Asian stocks outside Japan slipped 0.1 percent by 0218 GMT after hitting an intraday record high last Friday.
Most major regional markets were down between 0.2 percent and 1.1 percent, but South Korea's KOSPI and Taiwan's TAIEX bucked the weaker trend, rising 0.1 percent and 1.5 percent, respectively.
The Taiwanese market was buoyed by the weekend announcement that Ma Ying-jeou, front-runner to become the island's next president, chose a former premier and economic expert as his running mate.
On Wall Street, the blue-chip Dow and tech-heavy Nasdaq Composite Index both fell more than 1 percent after steep losses on investments in risky mortgage securities at two Bear Stearns hedge funds weighed on confidence.
In the currency market, the yen stayed under pressure as investors continued to favor carry trades, where they sell low-yielding currencies in preference for higher-yielding ones.
The dollar, trading at 123.89 yen, was near a peak 124.14 yen set last Friday -- a level last seen in December 2002.
The euro bought 166.83 yen, not far off the all-time high of 166.94 yen set on Friday, and it was little changed against the dollar at $1.3463.
Traders feel safe to sell the yen because a weakening yen is supportive for Japan's economy and there are no strong attempts by policy makers here to stop the falling yen, said Kengo Suzuki, currency strategist at Shinko Securities.
Meanwhile, benchmark London Brent crude for August slid 58 cents to $70.60 a barrel by 0218 GMT, well down from a 10-month high of $72.25 early last week spurred by worries over the potential impact of the indefinite general strike in Nigeria.
Spot gold slipped to $653.05/653.75 an ounce from $653.60/655.10 late in New York on Friday, where it gained more than $2.
Caution ahead of a slew of Japanese economic data this week were seen keeping a lid on Japanese government bonds (JGBs), which gained in line with a rise in U.S. Treasuries.
Prices could edge up a bit more, but given the upcoming events, gains should be capped in the near term, said Tatsuya Miura, a bond strategist at Shinko Securities.
Yields on the benchmark 10-year JGBs eased 1.5 basis points to 1.88 percent.