 "Asian shares dragged down by sagging China stocks")
Asian equities were mostly lower on Monday, dragged down by faltering Chinese stocks, while the dollar held modest gains against the euro after upbeat US economic data, with a further dollar rise seen as the yuan showed signs of stabilising for now.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.7%.
The index added to last week's loss of 2.6% suffered after Beijing devalued the yuan, buffeting global financial markets and fanning concerns about China's economy.
The yuan fell more than 4% at one point, pulling down riskier assets such as emerging currencies globally amid fears the devaluation would spark a global currency war, but financial markets began stabilising towards the end of last week as China slowed the pace of the currency's depreciation.
In a tell-tale sign that some of the relief felt towards the end of last week from a slowing in the yuan's slide could be fading already, Shanghai shares lost 0.9% after gaining nearly 6% the previous week.
Futures trading also reflected underlying investor pessimism towards an equity market Beijing has tried desperately to prop up, with the China CSI300 futures down 2.1%.
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Oil prices down near six-year lows also bit into the markets of the region's export-reliant economies. Malaysian stocks suffered a 1.5% fall and the ringgit was stuck near a 17-year low.
But in a sign that nerves continued to settle in some quarters after the yuan devaluation last week, Japan's Nikkei and Australian stocks bucked the trend to gain 0.4% and 0.3%, respectively.
"As concerns over the Chinese yuan continue to ebb, and with the prospect of further rises in the dollar in the lead up to the Fed's (September) meeting, the Nikkei may well recover last week's losses this week," wrote Angus Nicholson, market analyst at IG in Melbourne.
The dollar was steady at 124.39 yen.
The yen was unfazed by Monday's data showing Japan's economy shrank in the second quarter. Though a contraction was expected, concerns that the third quarter may see only mild improvement could rekindle expectations of further monetary easing by the Bank of Japan.
The euro slipped 0.2% to $1.1092, handing back some of the big gains made last week when the initial shock of yuan's devaluation pushed the dollar lower.
The greenback got a lift at the end of last week from encouraging data on US producer prices and industrial output that helped support the case for the Federal Reserve hiking interest rates at its monetary meeting in September.
Meanwhile, the People's Bank of China on Monday, setting the yuan's midpoint at 6.3969, a touch firmer than the previous session's fix of 6.3975.
"Stabilization in yuan fixes could clear the air for renewed dollar appreciation. With reduced volatility, fears on passthrough from the China devaluation to Fed policy should subside and this may see focus shift back to the situation in the United States," wrote Todd Elmer, head of Citi's G10 strategy in Singapore.
Suggesting that global financial market interest had moved away from Greece and on to other matters like China's bid to weaken its currency, the euro drew little support even after the European Commission confirmed a deal to lend cash-strapped Athens up to 86 billion euros over three years.
The Australian dollar, often used as a liquid proxy of China-related trades, was little changed at $0.7380 .
The Aussie sank to a six-year low of $0.7217 earlier last week after China's depreciation but recovered ground as Beijing stepped in to arrest the yuan's decline.
While China's central bank says there is no reason for further weakening in the yuan, many traders suspect sluggish economic data and expectations of further policy easing will keep the currency under downward pressure.
Crude oil, another market churned last week by China's shock move and its potential impact on demand for commodities, continued to struggle in the wake of global oversupply concerns.
US crude was down 1.4% at $41.91 a barrel, within reach of a six-year trough of $41.35 struck on Friday.