The yen edged down on Tuesday after the Bank of Japan held policy steady, shedding some gains made following killings in Germany and Turkey, while regional stocks were mixed after Federal Reserve Chair Janet Yellen's upbeat comments.
European stocks were also poised to open mixed, with financial spreadbetter CMC Markets predicting Britain's FTSE 100 .FTSE and Germany's DAX .GDAXI will open little changed, and France's CAC 40 .FCHI will start the day about 0.2 percent lower.
The BOJ maintained its pledge to guide short-term rates at minus 0.1 percent and the 10-year government bond yield around zero percent, while offering a more upbeat view of the economy than in its Nov. 1 assessment.
Stating that the economy continues to recover moderately as a trend, the central bank signaled its conviction that a generally weak yen and a rebound in overseas demand will lift prospects for a solid recovery.
The U.S. dollar advanced 0.6 percent to 117.89 yen, after closing 0.7 percent lower on Monday.
The greenback has risen 12 percent versus the yen since Donald Trump's surprise election victory, on his promises of increased fiscal stimulus.
Trump formally won the U.S. presidency on Monday after receiving more than the 270 Electoral College votes required to be elected.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS shed earlier gains to trade down 0.2 percent. Volumes were low in some markets ahead of year-end holidays.
Japan's Nikkei .N225, flat before the BOJ decision, ended the day up 0.5 percent.
"There was no particular surprise from the policy meeting, but investors are happy that the economy's fundamentals are finally rising after the BOJ expressed an upbeat view of the economy," said Takuya Takahashi, a strategist at Daiwa Securities.
China's CSI 300 index .CSI300 slid 0.6 percent, as Beijing's move to tighten supervision of shadow banking activities and persistent liquidity concerns restrained risk appetite. Hong Kong .HSI stocks dropped 0.5 percent.
Wall Street ended higher on Monday, albeit below the session's highs, as optimism over Yellen's comments about the U.S. labor market offset some of the risk aversion following the deaths in Germany and Turkey, and a shooting attack in a mosque in Switzerland.
"Yellen painted a very positive picture in her commentary overnight," said James Woods, global investment strategist at Rivkin Securities in Sydney.
"The (Federal Open Market Committee) has done a fantastic job preparing the market for this second and subsequent hikes. Importantly they have continued to stress that the FOMC remains data dependent, only hiking when the underlying fundamentals of the economy support this."
Still, markets were rattled after a truck plowed into a crowded Christmas market in central Berlin Monday evening, killing 12 people and injuring 48 others.
Berlin police said on Twitter on Tuesday that investigators assume the truck was driven into the crowd intentionally in a suspected terrorist attack, and that a Polish man found dead in the truck was not controlling it.
The euro EUR=EBS, which slid 0.5 percent to $1.0401 on Monday, extended losses to trade 0.15 percent lower at $1.03855 on Tuesday.
Pressure also came on the euro after the Russian ambassador to Turkey, Andrei Karlov, was shot and killed at an art gallery in Ankara, the capital.
The Turkish lira recovered 0.3 percent to 3.5196 per dollar on Tuesday after falling 0.7 percent on Monday. The rouble was steady at 61.8926 per dollar. It slumped to as low as 62.0907 per dollar on Monday but recovered to end the day up 0.3 percent at 61.8475.
In Switzerland, a man stormed into a Zurich mosque on Monday evening and opened fire on people praying, injuring three, Swiss police said.
The safe haven Swiss franc remained resilient, holding steady at 1.068 per euro, following a 0.4 percent gain on Monday.
The dollar index .DXY, which tracks the greenback against a basket of six global peers, climbed 0.2 percent to 103.37 on Tuesday, extending Monday's 0.2 percent gain after Yellen's upbeat labor market assessment.
Gold XAU, which rose 0.4 percent on Monday, pulled back 0.3 percent to $1,135.06 an ounce, as the prospect of further U.S. rate hikes outweighed geopolitical concerns.
Oil prices also eased as traders began to unwind positions in the run-up to the holiday season.
U.S. crude slid 0.4 percent to $51.91 per barrel.
Global benchmark Brent slipped 0.2 percent to $54.81.
Reference: Nichola Saminather