Asian shares hovered just off six-week highs on Wednesday, as a more risk-averse mood spread into the market from the United States overnight due to worries about slowing growth that hurt equities while helping the dollar firm.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.13 per cent having posted gains, if sometimes small, for 11 of the last 12 sessions.
Japan's Nikkei reversed early losses and was last 0.42 per cent higher after revised gross domestic product growth figures beat expectations for the world's third-biggest economy.
Most other moves were muted in early trading. Australia slipped 0.32per cent, Chinese blue chips fell 0.04 per cent, and the Hong Kong benchmark gained 0.12 per cent.
Medium-term prospects for the region also continue to weigh on shares in Asia. The MSCI regional benchmark is still well off all-time highs, unlike equity markets in the US and Europe.
"The Asia Pacific region – following a zero-tolerance (coronavirus) pandemic policy and reliant on exports for growth - could underperform as global demand for goods softens and social distancing restrictions in many APAC cities are reimposed," said David Chao, Global Market Strategist, Asia Pacific (ex-Japan) at Invesco
"This, coupled with the region's much lower vaccination rate, could lead to a continued cycle of lockdown and releases."
US stock futures, the S&P 500 e-minis, gained 0.10per cent.
Overnight the MSCI world equity index retreated from a record high after seven consecutive days of gains.
US shares had slipped, said analysts at ANZ in a note, on concerns that the US economy may be starting to slow following "the weaker-than-expected jobs data on Friday evening after which markets were closed for a long weekend."
In Europe, meanwhile, they said, "markets are focused on whether the European Central Bank will begin to scale back its bond purchase programme."
The Dow Jones Industrial Average and S&P 500 fell 0.76 per cent and 0.34 per cent while the Nasdaq Composite climbed 0.07 per cent to another record close as investors switched out of cyclicals into blue-chip tech stocks.
The dollar held onto its overnight gains against a basket of its peers having risen from near a four week-low overnight alongside benchmark US treasury yields.
Yields on 10-year Treasury notes dropped back in Asian hours and were last at 1.3570 per cent compared to a US close of 1.371 per cent on Tuesday, after touching an eight-week high of 1.385 per cent earlier in the day.
Higher yields had hurt non-interest-bearing gold overnight, but the spot price gained 0.18 per cent on Wednesday to $1798.03 per ounce, edging back towards $1800 having fallen below the level in the previous session.
Bitcoin paused for breath after plunging 17 per cent on Monday to a low of around $43,000 before recovering. It was last at $47,000, little changed in Asian hours.
US crude oil meanwhile ticked up 0.29 per cent to $68.55 a barrel as Brent crude gained 0.1 per cent to $71.73 per barrel.