Asian shares eased in holiday-thinned trading on Monday and the safe haven yen gained as China cancelled upcoming tariff talks with the United States, while oil prices jumped after top producers including Russia ruled out boosting crude output.

US stock futures were a touch weaker while MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.3 per cent. Australian shares fell 0.25 per cent and New Zealand's benchmark index faltered 0.6 per cent. Most of the action was in currencies as financial markets in major Asian centres Japan, China and South Korea were closed for a holiday.

Investors were squarely focused on the Sino-US trade war as China added $60 billion of US products to its import tariff list, retaliating against US duties on $200 billion of Chinese goods that come into effect on Monday.

China also cancelled mid-level trade talks with the United States, as well as a proposed visit to Washington by vice premier Liu He originally scheduled for this week, the Wall Street Journal reported. The United States, meanwhile, does not have a date for further talks. The intensifying dispute between the world's two biggest economies has spooked financial markets worried about the fallout on global growth.

The Japanese yen, which sees fund inflows during times of crisis, ticked up to 112.5 per dollar from a recent two-month trough while the trade-sensitive Australian dollar slipped from a 3-1/2 week top to $0.7274. “The trouble is that further escalation is still on the cards as both sides are still well apart on the key issues,” said AMP Chief Economist Shane Oliver. “Trump remains defiant saying 'it's time to take a stand on China' and his threat to increase tariffs on all imports from China remains.”

Oliver remained optimistic about Chinese growth as authorities in Beijing step up policy stimulus to offset the economic impact of the tariffs. Chinese Premier Li Keqiang said over the weekend China will cut import and export costs for foreign firms as it looks to promote an image of being open for business. “Our view remains that a negotiated solution is likely but it's unlikely to come until later this year or early next,” Oliver said.

On Friday, Wall Street closed mixed with the Dow adding 0.32 per cent, he S&P 500 mostly unchanged and the Nasdaq easing 0.51 per cent.

Brexit and Fed

Britain's exit from the European Union will be another key issue for investors, with risks of a 'no deal' or 'hard Brexit' shooting up again. On Friday, British Prime Minister Theresa May said talks with the European Union had hit an impasse after the bloc's leaders rejected her “Chequers” plan without fully explaining why.

The pound fell as much as 1.4 per cent on Friday, its biggest one-day percentage loss since June 2017. It was last at $1.3080, slightly above Friday's $1.3053 which was the lowest since mid-September. The euro eased from a three-month peak on Monday to last trade at $1.1744.

The dollar's index, which measures the greenback against a basket of major currencies, was last at 94.22 to hover near its weakest point since early July. The dollar was hammered late last week as investors ramped up bets that the US Federal Reserve will be near the end of its rate-hike cycle after an expected increase this week. The Fed will end its two-day policy meeting on Wednesday.

Oil prices gained as OPEC's leader Saudi Arabia and its biggest oil-producer ally outside the group Russia effectively rebuffed US President Donald Trump's calls for action to lower prices. Brent crude futures gained 92 cents to $79.72 a barrel, while US crude futures rose 77 cents to $71.55.

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