Pro-Russian rebels paraded European monitors they are holding in eastern Ukraine on Sunday, freeing one but saying they had no plans to release another seven as the United States and Europe prepared new sanctions against Moscow.
MSCI's broadest index of Asia-Pacific shares outside Japan oscillated between positive and negative territory, and was last trading flat.
Japan's Nikkei stock average skidded 1.2 percent, despite data released before the market opened showing retail sales rose in March at their fastest pace in 17 years ahead of a sales tax hike.
"Weaker U.S. equities and the stronger yen is being received negatively by the domestic stock market. Potential buyers are also sidelined ahead of tomorrow's public holiday," said Yutaka Miura, senior technical analyst at Mizuho Securities in Tokyo.
Tokyo markets will be closed for Showa Day on Tuesday, the birthday of the previous emperor.
Caution ahead of central bank meetings this week, as well as key U.S. jobs data on Friday, also kept investors wary.
Non-farm payrolls are expected to show an April rise of more than 200,000, as harsh winter weather finally dissipated and a later Easter holiday led to extra hiring.
Federal Reserve policymakers will meet on Tuesday and Wednesday and are expected to unanimously decide to continue tapering the central bank's massive bond-buying stimulus for now. Policymakers were expected to hotly debate future actions, such as what economic conditions would set the stage for a rate hike.
"With the steady improvement in U.S. labor data, there exists a very small tail risk of a more hawkish lean," strategists at Citi wrote in a note to clients.
The Bank of Japan will release new economic projections following its meeting on Wednesday, at which it is expected to stand pat on policy.
The BOJ will likely keep its inflation forecast for fiscal 2015 roughly unchanged from the current 1.9 percent, and is also set to estimate fiscal 2016 inflation close to 2 percent, signalling that it is optimistic of achieving sustained price rises over a longer time frame, sources have told Reuters.
On Wall Street on Friday, the three main U.S. stock indexes all fell for both the session and the week, as disappointing earnings from Amazon and Ford on Thursday and the rising Ukraine tensions sapped sentiment.
Major currency pairs remained locked in recent ranges, with the heightened Ukraine crisis bolstering the safe-haven yen.
The dollar inched down 0.1 percent to 102.14 yen, within sight of a one-week trough of 101.96 yen hit on Friday, while the euro also dipped about 0.1 percent to 141.19 yen.
The euro edged down about 0.1 percent to $1.3824 after it added 0.2 percent last week. That helped the dollar index gain nearly 0.1 percent to 79.780, after it lost 0.1 percent last week.
In commodities trading, the Ukraine unrest helped push gold up about 0.1 percent to $1,303.96 an ounce after it earlier hit $1,306.11 - its highest since April 16.
Brent crude gained 0.2 percent to $109.82 a barrel, buoyed by the rising Ukraine tensions and Libya's delay in re-opening a damaged eastern port.
Copper climbed 0.4 percent to $6,790.25 a tonne after touching its highest in seven weeks on Monday on tight Chinese copper supply, while nickel pushed to its strongest in almost 15 months in the wake of Indonesia's ban on ore shipments.