European stocks <.FTEU3>, however, were seen likely to extend last week's falls, hit by the White House's plan to curb risk taking by financial institutions, weaker-than-expected corporate earnings and fears that the global recovery may be losing steam.
The U.S. dollar fell and high-yielding currencies edged up on signals that Federal Reserve Chairman Ben Bernanke was moving closer to being appointed for a second term, which re-awakened some investor appetite for riskier assets.
The Nikkei <.N225> ended down 0.74 percent at a four-week closing low as a stronger yen weighed on shares of exporters such as Toyota Motor Corp <7203.T>, but the index pared early losses of up to 1.2 percent. <.T>
The MSCI index for Asia ex-Japan shares <.MIAPJ0000PUS> was down 0.8 percent but also off the day's lows.
Gains in U.S. stock futures prompted investors to expect a rebound on Wall Street after sharp falls, while buying on dips appeared as the Nikkei has fallen below its 25-day moving average, said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
U.S. stock futures rose 0.5 percent, pointing to a firmer open later in the day.
Wall Street stocks fell as much as 2.7 percent on Friday on
worries over President Barack Obama's plan to curb banks and after Google Inc posted strong revenue growth that nevertheless disappointed some investors, hitting tech shares. <.N>
With the sudden loss of leadership from the financial and tech sectors, which have led a global rally in recent months, analysts are unsure if equities will continue to sink. Some investors fear the global economic recovery may be slowing, which would further impede corporate profit growth, and a number of technical indicators point to more market weakness.
But some key Asian stocks rebounded on perceptions they had been oversold, including Hong Kong's Henderson Land <0012.HK> and Korea's Samsung Electronics <005930.KS>. Henderson Land rose 1.6 percent while Samsung Electronics added 2 percent.
Other markets also showed signs that investor risk appetite may be recovering after global markets recoiled last week on a host of unsettling factors.
Fitch upgraded Indonesia's sovereign credit rating to one notch below investment grade on Monday, giving a vote of confidence to one of Asia's strongest economies that has become a big favorite to investors across the world.
The upgrade of Indonesia's long-term foreign and local currency ratings tightened spreads on credit default swaps and pulled the rupiah off intraday lows. Analysts said an investment grade rating was likely in the next few years.
In foreign exchange markets, high-yielding currencies like the Aussie and the kiwi rose, inching up to $0.9060 and $0.7145 respectively, from $0.9003 and $0.7110 late on Friday.
Investors were also spooked last week after several key senators announced their opposition to Bernanke's reappointment, but the top Senate Republican on Sunday predicted confirmation, providing support to high-yielding assets.
The U.S. dollar edged up against the yen to 90.20 yen, from 89.87 yen late on Friday in New York but fell about 0.1 percent against a basket of six currencies <.DXY>.
The yen had struck a five-week high against the dollar and a nine-month high on the euro on Friday as investors rushed toward safe-haven assets.
Still, demand for riskier assets and higher-yielding currencies is likely to remain subdued amid rising concerns over Greece's fiscal problems; worries that China's efforts to curb its surging economy may impair global growth and fears that the populist turn at the White House might impact U.S. bank earnings.
Traders are awaiting investors' response to Greece's proposed issue of a 5-year benchmark bond issue later on Monday as a test of investor appetite, analysts said.
In other markets, crude oil steadied near its four-week low of below $75 a barrel, while spot gold trekked upward to $1,100.80 per ounce from the New York close of $1,091.65 as the dollar edged down and investors bet that the fall in bullion prices last week was overdone.
(Editing by Kim Coghill)