By Agence France-Presse
The fall in the dollar came as US President Donald Trump attacked Washington's main trading partners for their currency policies on Friday.
"China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day - taking away our big competitive edge. As usual, not a level playing field," Trump tweeted.
Trump's combative stance has compounded fears of an all-out trade and currency war, with the US slapping tariffs on steel and aluminium from the EU, Canada and Mexico, in addition to levies on goods from China worth tens of billions of dollars.
In an interview with US channel CNBC broadcast Friday, Trump threatened to impose taxes on all Chinese imports, saying the US has been "ripped off by China for a long time".
Tokyo plunged 1.3 percent -- falling for a third straight trading day -- as a stronger yen hurt exporters, making their products less competitive abroad and eroding repatriated profits.
Hong Kong ended the day flat while Seoul and Sydney slid 0.9 percent. But Shanghai jumped more than one percent and Jakarta advanced 0.7 percent.
European markets opened lower, with London and Paris dropping 0.3 percent and Frankfurt falling 0.4 percent.
Oil markets rose slightly, though analysts cautioned that concerns about the trade dispute would likely weigh on prices in the short to medium term.
"The impact of the trade war and the recognition that President Trump and his administration are serious about going to the mat on this issue is finally starting to register in the consciousness of traders and investors in oil and other financial markets", said Greg McKenna, chief market strategist at AxiTrader.
"That means we are seeing downgrades, in some cases material, to the outlook for global growth and as a consequence the demand for oil," he added.
Fears that the tensions would escalate into a full-blown trade war dominated a meeting of Group of 20 finance ministers and central bankers at the weekend in Buenos Aires.
The final communique from the group of leading economies stressed "the need to step up dialogue and actions to mitigate risks and enhance confidence" as worries have mounted.
EU finance chief Pierre Moscovici warned that "further trade escalation conflicts would negatively affect" all the countries involved, the US included. Protectionism benefits no one, and creates "no winners, only casualties".
International Monetary Fund chief Christine Lagarde agreed, and again spoke out against the tit-for-tat tariffs and urged that "trade conflicts be resolved via international cooperation without resort to exceptional measures".
The IMF warned recently that in a worst-case scenario, $430 billion of global GDP -- or a half percentage point -- could be lost in 2020 if all tariff threats and retaliations are carried out.
But US Treasury Secretary Steven Mnuchin defended Washington's stance and shrugged off the economic impact of the trade spat, saying so far the tariffs have only affected the US on a "micro" scale, adding that from a "macro standpoint we do not yet see any significant pattern on the economy".
Key figures at 0800 GMT
Tokyo - Nikkei 225: DOWN 1.3 percent at 22,396.99 (close)
Hong Kong - Hang Seng: FLAT at 28,240.44 (close)
Shanghai - Composite: UP 1.1 percent at 2,859.54 (close)
London - FTSE 100: DOWN 0.3 percent at 7,655.09 (open)
Euro/dollar: UP at $1.1730 from $1.1723 at 2100 GMT
Pound/dollar: UP at $1.3149 from $1.3135
Dollar/yen: DOWN at 110.95 yen from 111.50 yen
Oil - Brent Crude: UP 11 cents at $73.18 per barrel
Oil - West Texas Intermediate: UP three cents at $68.29 per barrel
New York - Dow: DOWN less than 0.1 percent at 25,058.12 (close)