Asian stocks fell to six-week lows on Monday and emerging market currencies wilted as investors sought the safety of the greenback in the wake of Friday's deadly attacks in Paris and downbeat economic data.

MSCI's broadest index of Asia-Pacific shares outside Japan fell more than 1 per cent in early trade after a 3 per cent loss last week.

Leading the losers were the Nikkei stock index which tumbled nearly 1.3 per cent, nearly wiping out last week's 1.7 per cent gain as latest economic data undershot expectations.

Data released before the Tokyo market opened showed that Japan's economy slipped back into recession in the July-September quarter, contracting at a 0.8 per cent annualised rate, compared with the median estimate for a 0.2 per cent contraction.

The widely tracked CBOE volatility index or "fear gauge" was at its highest level since Oct. 2.

"Risk aversion is on the rise and we are seeing broad-based US dollar strength across the board and this may continue until the year end as recent economic data has also disappointed," said Mitul Kotecha, head of Asian FX and rates strategy at Barclays in Singpore.

Recent economic data from China, where stock markets have recovered some of their poise after a summer collapse, has disappointed global investors.

Credit activity in China's financial system dropped to its lowest level in 15 months in October, while data last week showed steel consumption, a key measure of economic activity, slowed further.

Stock futures were pointing to another weak start on Wall Street after main indexes shed about 1 per cent in light volume in late trading on Friday. News of the attacks by gunmen and bombers that killed 132 people in the French capital came after US markets closed.

RUSH TO SAFETY

Losses for equity punters translated into gains for bond investors.

Yields on 2-year US Treasury debt, the part of the yield curve most sensitive to rapid changes in investor positioning, edged lower to 0.83 per cent from 0.86 per cent on Thursday, retracing part of its impressive rise from late October.

In currency markets, the euro dropped about 0.5 per cent to $1.07205, after logging a flat performance last week. It was down 0.5 per cent against the yen at 131.24 yen .

"Currency markets have responded to the atrocities in Paris over the weekend," said Richard Grace, chief currency strategist at Commonwealth Bank of Australia.

The dollar slipped about 0.1 per cent against the yen to 122.43.

The dollar index, which tracks the greenback against a basket of six major rivals, was broadly flat at 99.082.

French warplanes pounded Islamic State positions in Syria on Sunday as police launched an international hunt for a man they believe may have helped organise the deadly wave of assaults.

"What might be affected from the Paris attacks could be a change in spending from the consumer over the coming quarter and a possible shift in confidence," Evan Lucas, market strategist at trading platform provider IG in Melbourne, wrote in a note to clients on Monday.

In one sign of stability for the euro zone, Greece and its euro zone creditors reached an agreement on many issues in the reform program that Athens is implementing in return for loans, the head of euro zone finance ministers Jeroen Dijsselbloem said on Sunday.

French financial markets will be open as usual on Monday, with extra security measures taken for staff, stock and derivatives exchange Euronext said a day after the attacks.

Markets in the Middle East, which trade on Sunday, were hit hard, though part of that decline was due to last week's drop in oil prices.

Crude oil futures registered their biggest weekly loss in eight months, dropping 8 per cent on the week for their worst performance since March, as growing inventories fed into fears of oversupply.

Futures retraced some of the lost ground in early Asian trade. Brent was up 1 per cent at $44.92 a barrel after shedding 1 per cent on Friday, while US crude was up about 0.54 per cent at $40.96 a barrel after giving up 2 per cent.

Spot gold added about 0.5 per cent to $1,091.96 an ounce, moving away from its low on Thursday of $1,074.26, which was its deepest nadir since February 2010. – Reuters