The euro nursed heavy losses early in Asia as worries about European sovereign debt problems intensified following Moody’s credit rating downgrade for Greece on Monday.
U.S. crude for April dipped to $104.63 a barrel, easing further from a 2-1/2 year high hit on Monday, after Kuwait’s oil minister said the Organization of the Petroleum Exporting Countries (OPEC) was considering boosting supply to offset disruptions in Libya, where government forces are trying to quash a popular uprising.
North Sea Brent crude fell nearly 50 cents to $112.60.
An official oil output increase by OPEC would signal the group’s determination to cap prices, but unrest in the region has fuelled concerns about more supplies being cut off.
“Oil has stopped rising for now, but it hasn’t really retreated to levels that allows aggressive buying in risky assets, so investors will still be jittery,” said Hiroichi Nishi, general manager at Nikko Cordial Securities.
Japan’s Nikkei benchmark extended gains for a second day after the pullback in oil prices lifted Wall Street but investors remained worried that high fuel prices could stunt global economic growth and erode corporate earnings.
By midmorning, the benchmark Nikkei was up 1.3 percent, or 133.52 points, to 10,659.55. The broader Topix index gained 1.3 percent to 951.07. It broke above its 25-day moving average, key technical level closely watched by Japanese traders, now at 10,630.45.
MSCI’s index of Asia Pacific shares outside Japan edged up 0.01 percent, led by gains in consumer durables and financials.