By Lisa Twaronite
TOKYO (Reuters) - Asian share markets gave up more ground in early trade on Monday after a dismal week on Wall Street, helping underpin the safe-haven yen.
Ongoing tensions in Ukraine also sapped investors' appetite for risk. Ukraine gave pro-Russian separatists a Monday morning deadline to disarm or face a "full-scale anti-terrorist operation" by its armed forces, raising the risk of a military confrontation with Moscow.
European Union foreign ministers will hold talks later on Monday about tougher sanctions against Russia.
MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.2 percent, pulling further away from five-month highs hit on Thursday.
But Japan's Nikkei stock average reversed initial losses and ticked up 0.3 percent, clawing its way off six-month lows after shedding 7.3 percent last week. That was their biggest weekly fall since devastating earthquake and tsunami in March 2011.
Gains were likely to be tentative, though, as some investors braced for the possibility of further losses on Wall Street.
"Some are worried that a U.S. bubble in equities markets might be corrected, because of the ongoing tapering" of monetary stimulus by the U.S. Federal Reserve, said Kyoya Okazawa, head of global equities at BNP Paribas in Tokyo.
S&P 500 e-mini futures were down about 0.2 percent early on Monday. U.S. stocks slid in a volatile session on Friday, with the Nasdaq closing below the 4,000 mark for the first time since early February as investors bailed out of high-flying technology and biotech shares. <.N>
The low-yielding yen benefited from the heightened risk aversion. The dollar was down about 0.1 percent in early trading at 101.56 yen, after touching a 3-1/2 week low of 101.32 yen on Friday, a far cry from a 2-1/2 month high of 104.13 yen set on April 4.
The dollar index steadied, rising about 0.2 percent to 79.633, though April 4's seven-week high of 80.599 remained a distant memory after the greenback's battering last week as U.S. stocks tumbled.
"Given the technical damage inflicted on the dollar and the decline in U.S. interest rates, it is tempting to look for the greenback's losses to accelerate," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.
"We are more inclined to think that rather than breaking out, the dollar simply moved to the lower end of its ranges. This means that the greenback may do a bit better in the days ahead as participants will likely be denied fresh incentives," he said in a note to clients.
The dollar got some help against the euro from European Central Bank officials, whose comments rekindled speculation about more easing in the euro zone.
The euro fell about 0.3 percent to 140.66 yen. Against the dollar, it shed about 0.2 percent to $1.3851, moving away from a 3 1/2 week peak of $1.3906 hit on Friday.
ECB President Mario Draghi on Saturday told a news conference that "a further strengthening of the exchange rate would require further stimulus.
The ECB is ready to make asset purchases if it deems them necessary to counter a prolonged period of low inflation, ECB Executive Board member Benoit Coeure said on Sunday. ECB governing council member Christian Noyer said on Monday in an interview with daily newspaper Le Figaro that euro weakening was desirable.
Spot gold XAU= benefited from the move toward safe-haven assets, adding about 0.6 percent to $1,326.50 an ounce, after earlier marking a new three-week high.
U.S. crude for May delivery added 0.5 percent to $104.26 per barrel, bolstered by fears that the Ukraine situation could escalate.
(Editing by Shri Navaratnam)