The dollar strengthened against the yen on Monday and oil prices rose as investors unwound safety trades after the failed coup in Turkey, while SoftBank Group's $32 billion deal to buy British chip designer ARM Holdings lifted European equities.
Turkish shares fell 3.5 per cent on Monday but the lira, which hit a three-week low against the dollar on Friday as news of the coup attempt broke, rose nearly 3 per cent as authorities launched a purge of suspected plotters.
Investors had initially bought safe-haven assets such as the yen, gold and US Treasuries on reports of the coup but these trades were largely unwound on Monday.
The yen fell 0.9 per cent to 105.80 per dollar and the euro rose 0.2 per cent to $1.1055.
“The scenario looks a bit calmer now ... so we're back to thinking about the sort of policy outlook that had the yen falling against the dollar last week,” said Jeremy Stretch, head of currency strategy at CIBC in London.
Gold fell 0.9 per cent to about $1,326 per ounce, with prices pressured by the stronger dollar.
Crude oil, which initially fell as the Turkish army said it had seized control in a country bordering Syria, Iraq and Iran, edged up on Monday. Brent crude, the international benchmark, was 8 cents higher at $47.69 a barrel.
“The market is looking past the coup,” said Ric Spooner, chief market analyst at Sydney's CMC Markets. “There is no disruption to shipping. There is nothing in terms of short-term risk (to oil supply),” he said.
Istanbul's Bosphorus Strait, which handles about 3 per cent of global oil shipments, reopened on Saturday after being shut for several hours on Friday.
European shares opened higher, led by a surge of almost 45 per cent in ARM Holdings. SoftBank will pay 17 pounds a share for ARM - a premium of more than 40 per cent to Friday's closing price.
ARM last traded at 1,708 pence, up 44 per cent. Japanese shares were closed for a holiday.
The pan-European STOXX 600 index was up 0.7 per cent and the FTSEurofirst 300 gained 0.6 per cent.
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.3 per cent, having reached its highest in almost nine months last week. Australia rose 0.5 per cent. Chinese shares fell, led lower by real estate and construction shares after data showed growth in house prices slowed last month.
US stock index futures were up, indicating Wall Street would open higher after closing flat on Friday.
Yields on US Treasuries, which were also in demand on Friday as the Turkish coup bid unfolded, were down on the day but up from Friday's closing levels. Ten-year yields stood at 1.58 per cent.
German 10-year yields, the euro zone benchmark for borrowing costs, fell 1.7 basis points to minus 0.08 per cent.
Monetary easing
Core government bond yields have been falling across the developed world, with many turning negative, in anticipation of monetary easing to help ignite weak growth and inflation.
The European Central Bank meets this week and while no change is expected this time, further steps are seen likely in September.
Investors also expect easier policy from the Bank of Japan and the Bank of England while markets price in little chance of any hike in Federal Reserve interest rates this year.