Asian equities were mostly lower in Monday trade, with the dollar sinking against the yen, as investors focused on Korean Peninsula tensions and Chinese economic data due later in the morning.
North Korea tested a missile which "blew up" soon after launch, following a military parade to commemorate the birthday of Kim Il-Sung over the weekend, Reuters said. The test came before US Vice President Mike Pence arrived in Seoul for a trip that aims to reassure American allies in Asia.
"(A)fter the share market gains of the last year, global ... shares are a bit vulnerable to a correction and military conflict with North Korea may be a trigger ... The bottom line though is that while conflict with North Korea will cause some volatility in investment markets, a long drawn out negative impact is unlikely," said AMP Capital Chief Economist Shane Oliver in a note last Saturday.
The dollar/yen traded at 108.32, earlier plunging to its lowest levels since 15 November last year. Likewise, the yen was stronger compared to the euro, with the euro/yen weakening to a 5-month low of 114.82 yen earlier in the session. The euro/yen traded at 115.04 yen at 9:00 am HK/SIN.
Demand for other safe-haven assets strengthened, with spot gold trading at USD 1,294.34 an ounce at 8:55 am HK/SIN, hitting a five-month high of USD 1,295.50 earlier in the session.
"Gold has surged (classic geopolitical risk reflex) along with the slump in US Treasury yields (another haven trade) while equities are softer ... Nonetheless, emerging markets and higher yielding currencies have not sold off in alarm either, with most emerging market Asia currencies still fairly buoyant," Mizuho economist Vishnu Varathan said in a Monday morning note.
Japan's Nikkei 225 was lower by 0.5 percent but the Kospi climbed 0.43 percent. In mainland China, the Shanghai Composite dropped 0.64 percent while the Shenzhen Composite fell 0.672 percent.
Hong Kong, Australia and New Zealand markets are closed for Easter Monday.
On the energy front, Brent crude was lower by 0.41 percent to trade at USD 55.66 per barrel and US crude fell by the same amount to trade at USD 52.96. Oil prices had hit a one-month high last Wednesday following news that OPEC could extend output cuts beyond June.
In other currency news, the greenback traded weaker against a basket of rivals at 100.39, significantly lower compared to the 101 handle seen last week. The Aussie strengthened to trade at USD 0.7587, its highest level since the beginning of April.
"What we see right now is the starting point for the dollar into 2017 was just very, very rich in terms of valuation. And as we see more disappointment from let's say Trump's policy and as the world outside the US looks better, I think we're still going to see that continuation of dollar weakness," UBS Head of Commodities and FX Dominic Schnider told CNBC.
"It's not going to be a weak currency but the dollar continues to slide on a trade-weighted basis."
Markets in Asia will be eyeing the release of key economic data from China later in the morning, including Q1 GDP figures at 10 am HK/SIN, March industrial production and March retail sales. Singapore is due to report March non-oil domestic exports (NODX) at 8:30am HK/SIN time.Stateside, US equities were lower across the board before the Good Friday holiday, with the Dow Jones industrial average, S&P 500 and Nasdaq all down by more than 0.5 percent.