The Liberal Democratic Party of Japan's electoral triumph propelled the yen to a 20-month low that saw the Nikkei stock average <.N225> open up 1.6 percent on expectations of much better export earnings.
But MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was little changed on Monday, after ending last week near 16-month highs which it had hit successively since December 5.
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The LDP surged back to power in a landslide election victory on Sunday, giving Prime Minister Shinzo Abe a chance to push his radical economic recipe calling for "unlimited" monetary easing and huge public works spending to bring the country out of decades-long deflation.
The Bank of Japan meets later this week and is widely expected to take further easing steps, but hold off from drastic measures until its next meeting after Japan's new cabinet is formed sometime later this month, analysts have said.
The dollar rose as far as 84.48 yen in early Asia, its loftiest since April 2011, from around 83.50 late in New York on Friday. The euro jumped more than 1 yen to well above 111 yen, a 7-1/2-month high, early on Monday.
"I think that the policies that Abe plans to introduce will only serve to weaken the yen even further. If there is an unwinding opportunity, it will likely be short lived, maybe falling back to 82 or so on the USD/JPY," said Neal Gilbert, market strategist at GFT Forex.
"In addition, with (BOJ Governor Masaaki) Shirakawa's term ending in April, Abe could get a BOJ Governor who thinks along the same lines. Therefore, I see the yen continuing to weaken based on Abe's policy, and the future policy of his hand-picked governor," Gilbert said.
Global shares fell on Friday displaying unease over the lack of progress in the U.S. fiscal talks, amid signs of a deepening recession in the euro zone as disappointing German manufacturing sector figures and a rise in euro zone unemployment overshadowed a small pick-up in purchasing manager data.
Australian shares eased 0.2 percent on uncertainty over the U.S. fiscal woes.
South Korean shares <.KS11> opened down 0.1 percent, as a fall in global shares prompted investors to refrain from taking large positions after seeing a steep weekly rise of 1.9 percent last Friday.
"As the KOSPI saw such strong upward momentum in a short period, a brief pause is inevitable," said Lee Seung-woo, an analyst at KDB Daewoo Securities, of Seoul shares.
U.S. House of Representatives Speaker John Boehner's offer to accept a tax rate increase for the wealthiest Americans knocks down a key Republican road block to a deal resolving the year-end "fiscal cliff," but questions such as which income levels, what rates and what's offered in return, remain unanswered despite the looming end-of-year deadline.
Failure to avert the fiscal cliff of some $600 billion of tax hikes and spending cuts scheduled to start in January could threaten to throw the U.S. back into recession and damage the fragile recovery taking place elsewhere, such as in No. 2 global economy, China.
Budget concerns have weighed on the dollar against a basket of major currencies , helping to lift the euro up to a 7-1/2-month high of $1.3188 early in Asia on Monday.
In a move seen aimed at restoring confidence in China's stock markets which have fallen by over 60 percent since November 2007 and have markedly lagged Asian peers in recent rallies, China's foreign exchange regulator has removed the $1 billion limit for foreign sovereign wealth funds, central banks and monetary authorities buying Chinese assets through the Qualified Institutionnal Investor Programme (QFII).
On economic front, China will maintain steady economic policies in 2013, leaving room for manoeuvre in the face of lobal risks while deepening reforms to support long-term growth, the official Xinhua news agency said after an annual policy-setting conference on Sunday.
Data on Friday showed U.S. factory output posted its sharpest increase in nearly a year in November as auto production staged a rebound, while consumer prices slipped, offering cautious optimism for the struggling economic recovery.
In Europe, Italian centre-right leaders increased pressure on Prime Minister Mario Monti on Sunday to run for a second term in an impending election as the leader of an alliance of "moderates". Monti's intention to resign had raised concerns over the prospects of Italy's fiscal reforms.
U.S. crude was up 0.3 percent to $87 a barrel.
(Additional reporting by Joyce Lee in Seoul; Editing by Eric Meijer)