In nearly three months, the yen held near its strongest level against the dollar in the midst of demand for safe-haven assets after the US' killing of Iran's senior military officer disrupted Middle Eastern markets, setting the tone for what is expected to be a volatile week.
Japan's currency strengthened as markets opened in Sydney for a third straight day, while the Australian dollar weakened.
All of the main equity gauges in the Middle East dropped on Sunday. More than 4 percent fell in Kuwait, cutting a rally that made it the region's best market last year.
In Egypt, the EGX30 Index plunged by 4.4 percent, the highest since September, and stocks in the United Arab Emirates, Qatar, Bahrain, Israel, and Oman have also fallen.
Geopolitical risks flared after last week's killing of Iranian General Qassem Soleimani at Baghdad Airport in Iraq in a Trump-ordered drone attack. Iran vowed revenge, while Trump said the US listed 52 Iranian targets late Saturday that would be struck "very hard" if Tehran retaliated.
Iran also said it would no longer comply with any restrictions on uranium enrichment, while Iraq's parliament voted to expel US troops from the country.
Global markets turned sour Friday following Soleimani's killing, sending the emerging-market stock index of MSCI Inc. dropping the most in more than a month.
In key commodities, Brent crude has risen to $68.60 per barrel, its highest level since mid-September, and gold has nearly reached a six-year high, a safe-asset for investors during a tumultuous trading period.
In currencies, the yen strengthened 0.2 percent to hit 107.84 per dollar as markets reopened Monday, matching the pace of Friday that has been the strongest since Oct. 10. The dollar slipped 0.2 percent to 69.37 cents in the US.
The Swiss franc was up 0.2 percent to 0.9707 francs per US dollar, while the British pound and the euro remained unchanged.
The US greenback rallied against riskier currencies such as the kiwi and the Aussie. Against a host of other major currencies, the USD remained firm at 96.827.
Meanwhile, the cost of insuring the debt of Saudi Arabia against default has increased. Five-year credit default swaps in the country are now more costly compared to those of Indonesia for the first time in nearly two years, while Moody's Investors Service is reducing the latter four rates. All yields on Saudi Arabia, Abu Dhabi, Lebanon and Iraq's bonds have risen.
