Japan and Australia stocks fell on Monday morning after oil extended declines last week and many Asian stock markets were shuttered for the Lunar New Year holidays. Financial markets are waiting for U.S. Federal Reserve Chair Janet Yellen to speak on Wednesday, amid speculation the agency will hold off on further interest rate increases amid the global market turmoil since the start of the year.

Japan's Nikkei 225 fell 1.3 percent, Australia's ASX 200 0.4 percent.

The three major U.S. stock indexes fell on Friday resulting in weekly declines of 1.6 percent for the Dow Jones Industrial Average, 3.1 percent for the Standard and Poor's 500 and 5.4 percent for the Nasdaq Composite. The U.S. oil benchmark fell 83 cents, 2.6 percent, to $30.89 per barrel after U.S. inventories rose to a record, Reuters reported. The global benchmark fell 40 cents, 1.2 percent, to $34.06 per barrel.

Financial markets in China, Hong Kong, Taiwan, South Korea, Singapore, Indonesia, Malaysia, New Zealand and the Philippines are closed Monday. China will remain shut all week.

Yellen will testify before the House Financial Services Committee on Wednesday. The declines and gyrations in stock and oil prices have fueled speculation the Fed will hold off on raising interest rates in March. The Fed raised rates for the first time since the global financial crisis in December, leaving many observers to speculate on four more rate increases this year, starting in March. Speculation that interest rates won't rise has, in turn, helped make the U.S. dollar less attractive, boosting currencies like the yen and making it tougher for Japanese and other manufacturers to sell to the U.S. 

Lower oil prices have hurt energy companies and the many industries that supply them.

“The decline in U.S. stocks may weigh on Japanese shares, while a surplus in Japan’s trade balance may psychologically be a yen-buying factor,” Toshiya Yamauchi, a senior analyst in Tokyo at Ueda Harlow Ltd., a margin-trading services provider, wrote in a note to clients, as reported by Bloomberg.