Asia slips on Greece worries; oil holds gains after rally

Asian equities slipped on Tuesday as tensions over Greek debt terms and escalating conflict in Ukraine sapped risk appetite, while crude oil held its gains after surging on OPEC's optimistic demand forecast.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1%. Japan's Nikkei slipped 0.3% and Australian shares shed 0.5%.

The probability of a 'Grexit' from the euro zone has risen several notches as Greece has taken an increasingly hard line over its government debt.

Prime Minister Alexis Tsipras on Sunday ruled out extending Greece's bailout deal and said some of the reforms imposed by lenders would be reversed.

European Commission President Jean-Claude Juncker raised tensions further on Monday by saying Greeks should not expect the euro zone to accept the their latest terms.

"While we are not explicitly forecasting Greece's departure from the euro zone, the initial fall-out in the financial markets could be substantial if it happened and were disorderly," economists at Capital Economics wrote in a note to clients.

"Admittedly, the authorities in the euro zone have put lots of backstops in place to head off any contagion at the pass. But given the rising popularity of anti-austerity parties elsewhere in the region, we doubt investors would be completely convinced that Greece's departure was a 'one-off'."

In addition to euro zone worries, Asian investors had matters closer to home to consider. Following Sunday's disappointing Chinese trade figures, risk asset markets were focused on China inflation data at 0130 GMT in the face of renewed concerns over the world's second largest economy ECONCN.

In currencies, the euro stood little changed at $1.1328, having found support for now at a one-week low of $1.1270.

The dollar was steady at 118.58 yen after pulling back from a near one-month high of 119.23 reached late last week in a rally inspired by robust US non-farm payrolls.

Crude oil pulled back a little but retained the bulk of gains from a rally over the past three sessions. It jumped on Monday as OPEC forecast greater demand for crude this year than previously thought and projected less supply from countries outside the producer group.

US crude oil was down 0.6% at $52.57 a barrel CLc1 after gaining 2.3% overnight.