Appetite for Asian stocks and the euro evaporated on Tuesday as economic and political fears sent investors seeking shelter in the yen, while forecasts China's foreign exchange reserves has fallen for a seventh month added to jitters.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.15 percent while Japan's Nikkei dropped 0.45 percent as a stronger yen depressed stocks.
Chinese shares were little changed, ahead of data expected to show that foreign exchange reserves fell for the seventh straight month by about $10.5 billion to $3 trillion in January.
But some economists said reserves may have actually risen due to tighter controls on moving money out of the country, as well the impact of a weaker dollar.
Nevertheless, as foreign exchange reserves linger at around $3 trillion, concerns remain over the speed at which China has depleted its resources to defend the currency.
Overnight, both U.S. and European stocks dropped.
Wall Street dipped as much as 0.2 percent, led lower by the energy sector as oil prices fell, with investors still waiting for details of U.S> President Donald Trump's economic policies.
"The longer Congress and the Trump administration dither on fiscal stimulus, the less likely in everyone's estimation that it will come to pass," said Aaron Kohli, an interest rate strategist at BMO Capital Markets in New York.
European shares' declines came on the heels of the French presidential campaign launch of far-right National Front Leader Marine Le Pen on a platform pledging to flight globalisation and take France out of the European Union.
French stocks lost 1 percent, and yields on 10-year French government bonds hit their highest level since September 2015.
"Despite the reaction in the French yields, polls show Le Pen would finish runner-up by a wide margin to either Independent Emmanuel Macron or Republican Francois Fillon," James Woods, global investment analyst at Rivkin Securities in Sydney, wrote in a note.
The euro fell 0.2 percent to $1.07245 on Tuesday. On Monday, it dropped as much as 0.7 percent to a near one-week low before recovering to close down 0.3 percent.
The dollar rose 0.1 percent to 111.83 yen on Tuesday, recovering some of its 0.8 percent loss from Monday.
The dollar index, which tracks the greenback against a trade-weighted basket of its peers, was steady, retaining its gains of almost 0.1 percent from Monday at 99.907.
The Australian dollar slipped 0.1 percent to $0.7652. The New Zealand dollar jumped 0.6 percent to a near a three-month high of $0.7368.
The Australian central bank is expected to keep interest rates on hold at a record low 1.5 percent when it meets later on Tuesday.
Reserve Bank of New Zealand Governor Graeme Wheeler said on Tuesday he would not seek a second term when his current term ends on Sept. 26. Deputy Governor Grant Spencer will fill in for six months while a permanent replacement is recruited.
Oil prices inched higher on Tuesday after posting their biggest one-day loss since Jan. 18 on Monday, as worries about rising oil supply out of the United States tussled with optimism about output curbs elsewhere.
U.S. crude gained 0.2 percent to $53.13 a barrel, after falling 1.5 percent on Monday.
Global benchmark Brent also advanced 0.3 percent to $55.89, reclaiming some of Monday's 1.9 percent loss.
Gold surrendered some of Monday's strong gains but hovered close to its three-month high hit on the day.
Spot gold slipped 0.3 percent to $1,232.52 an ounce, after surging 1.3 percent on Monday.