Asian shares steadied on Tuesday but prices were capped by investor caution ahead of corporate earnings season for the last quarter of 2012 and the European Central Bank's policy meeting later in the week.
US stock prices retreated from five-year highs on Monday, spurring selling of oil, gold and other risky investments and reviving some safety bids for US and German government debt.
US earnings season unofficially kicks off when aluminium maker Alcoa
MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.1%, after drifting lower the previous session when investors took profits from the new year rally, which lifted the index more than 2% in the first week of 2013.
Australian shares were up 0.2%, near a 19-month high, with miners supported by firmer iron ore prices and signs of improved growth in China.
China's annual economic growth may have quickened to 7.8% in the fourth quarter, a Reuters poll showed, snapping seven straight quarters of weaker expansion, but the recovery is likely to be tepid and the economy may need continued policy support. The data is due out on January 18.
South Korean shares opened down 0.4%, after Samsung Electronics, the world's top maker of memory chips and handsets, estimated its October-December operating profit at a record 8.8 trillion won. Samsung's guidance, coming ahead of full quarterly results by January 25, was in line with forecasts.
"Trading for the new year kicked off in full force yesterday and it is natural for investors to start cautiously with profit taking from the new year's rally," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.
"I expect position adjustments to continue ahead of key events such as the ECB meeting and earnings reports starting with Alcoa," Saito said.
He said the euro could still push higher to around $1.3150 ahead of the ECB meeting.
Saito said the dollar may face selling pressure against the yen, having scaled its highest since July 2010 at 88.48 on Friday, up about 7% over the past month. But he said support was seen firm at 86.50 yen.
The dollar was down 0.5% to 87.32 on Tuesday.
Japan's benchmark Nikkei stock average opened 0.5% lower, after snapping a five-session winning streak on Monday when a pause in the yen's weakness triggered profit-taking on exporters.
The euro rose against the dollar on Monday on bets the ECB might refrain from signalling more interest rate cuts when it meets on Thursday. The single currency steadied around $1.3121 early on Tuesday.
"With a lighter data schedule, investors are likely to focus on the central bank communication this week. We look for unchanged policy at the ECB governing council meeting on Thursday." said Barclays Capital analysts in a research note.
US crude inched up 0.1% to $93.28 a barrel.
