Asian shares got off to a weak start on Tuesday, pressured by weaker crude oil prices, though Japanese shares got a tailwind as the dollar stood tall against the yen.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3 percent in early trading. Wall Street put in a mixed performance overnight, undercut by tumbling oil prices amid expectations that U.S. crude inventories would again build to record highs.
Japan's Nikkei stock index added 0.7 percent.
Investors warily awaited Chinese inflation data expected later on Tuesday, after Chinese equities markets plunged to eight-month lows on Monday when April trade data dashed investors' hopes for a strong economic recovery. Fresh regulatory curbs on speculation also sapped sentiment.
China's consumer inflation might show a rise to its highest levels since May 2014. Economists expected a 2.4 percent rise in the consumer price index, though that would be only slightly better than 2.3 percent in March and below the government's 3 percent target.
The dollar stood tall against the yen around 108.29 after gaining nearly 1 percent on Monday and reaching a one-week high of 108.60. The yen soared to 1 1/2-year highs last week.
"Don't underestimate the power of short covering," Kathy Lien, managing director at BK Asset Management, said in a note to clients.
While the dollar is "still a sell on rallies" against the yen, Lien said the currency could soar to 110 yen quickly if the 20-day simple moving average at 108.83 were broken. "When a currency ... squeezes higher quickly, causing investors to panic and abandon their positions, the rally could be sharp and aggressive particularly when positions are skewed so heavily in the opposite direction," she said.
The euro edged up slightly to $1.1386.
Undermining the greenback, Wall Street's top banks have all but abandoned any expectation that the Fed will raise rates in June, and most now see the U.S. central bank's next hike coming in September, according to a Reuters survey conducted on Friday after a weaker-than-expected rise in U.S. payrolls.
Fed officials on Monday gave investors no incentive to alter their monetary policy expectations. Chicago Fed President Charles Evans said he favored the current “wait and see” approach, while Minneapolis Fed President Neel Kashkari said the current policy stance was “about right.”
U.S. crude oil was down 0.3 percent in early Asian trade at $43.31 a barrel, after shedding 2.8 percent on Monday. Brent crude dropped 3.8 percent overnight to settle at $43.63.