TOKYO: Asian shares were nearly flat in early trading on Tuesday, while the dollar rebounded from steep losses against the yen in the previous session.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS did not stray far from its previous close, after Wall Street closed with modest losses overnight.

Australian shares were also nearly unchanged in early trade.

"While markets may be flat for now, the saying goes 'never short a dull market,'" Chris Weston, chief market strategist, IG Markets in Melbourne, said in a note to clients.

While he described sentiment as "undoubtedly bearish," prices are "delicately poised and could go either way."

Japan's Nikkei stock index .N225 slumped 0.5 percent.

The dollar nursed its losses against the yen after skidding nearly 1 percent against its Japanese rival in the previous session to a low of 109.12. It was last up 0.1 percent at 109.35 yen JPY=, moving back toward Friday's three-week high of 110.59.

Data on Monday showed Japan posted a trade surplus for the third consecutive month, and a Group of Seven finance ministers' meeting concluded on Saturday with a US warning to Japan against intervention to weaken the yen.

But overall, the dollar was bolstered by growing bets that the U.S. Federal Reserve was gearing up to raise interest rates sooner than some investors had expected.

On Monday, St. Louis Fed President James Bullard said investors' increasing expectations of a rate hike were "probably good," and that a relatively tight US labour market might put upward pressure on inflation.

San Francisco Fed chief John Williams said, "Over the rest of the year two or maybe three rate increases, maybe one or two more (than that) next year so maybe three or four next year - I think that's still about right."

Fed Chair Janet Yellen will appear at a panel event hosted by Harvard University on Friday, a day on which investors will also see the second estimate of US first-quarter growth. Markets also await comments from other Fed officials this week, as well as data on new home sales, durable goods orders and consumer sentiment.

The dollar index, which tracks the US unit against a basket of six major counterparts, was up 0.1 percent at 95.304, still with sight of Thursday's peak of 95.520, its loftiest level since March 29.

The euro edged down 0.1 percent to $1.1213 EUR=, holding above far last week's low of $1.1180, its lowest since late March.

Crude oil futures stabilised after dropping on Monday as Iran vowed to ramp up output and as the number of rigs drilling for crude in the United States held steady after declining for eight straight weeks.

US crude CLc1 was flat at $48.08 a barrel, while Brent LCOc1 was also nearly unchanged at $48.34.