Bareksa.com - Asian shares dipped and the safe-haven yen hovered just above a multi-month high against the dollar in early trade on Wednesday as the heightened possibility of Ukraine slipping into civil war dampened risk sentiment.

Ukraine has so far experienced its deadliest week since the separatist uprising began, leaving less room for peace efforts.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.1 percent. Japan's Nikkei lost 1.3 percent, tracking Tuesday's fall on Wall Street.

The dollar, which has lost about 0.5 percent against the yen so far this week, traded at 101.70 yen. A break below 101.32 would take the dollar to its lowest since Mar. 19.

The U.S. currency was also on the back foot against the euro, which was boosted on Tuesday by upbeat PMI readings in Spain and Italy. The euro was at $1.3927, hovering within distance of an eight-week high of $1.3952 hit on Tuesday.

The U.S. dollar index, which measures the greenback against six major currencies, stood at 79.13 after falling on Tuesday to 79.06, its lowest in more than six months.

Immediate focus for the dollar was on U.S. Federal Reserve Chair Janet Yellen's congressional testimony later in the session.

Yellen is widely expected to maintain a dovish policy stance, doing little to arrest the recent fall of the dollar, which has shown little reaction to positive economic data.

"Fed Chair Yellen is likely to dodge any questions pertaining to the specific timing of interest rate rises, given the furore after her suggestion at a press conference in March that rates might rise about six months after asset purchases end," analysts at Capital Economics wrote in a note to clients.

Expectations that the Federal Reserve will not raise interest rates soon in addition to safe-haven bids have kept U.S. Treasury yields low, hurting the dollar.

The U.S. Treasury 10-year note yielded 2.596 percent after touching a three-month trough of 2.57 percent on Friday.

In the commodities markets, oil edged up after crude stocks decreased, defying expectations for an increase, with geopolitical risks helping put a floor under prices.

"The market is balancing a weak fundamental picture against the worry that we could see a disruption in Russian supplies," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

U.S. crude was up 0.3 percent at $99.82 a barrel. (Source : Reuters)