SINGAPORE - Asian shares eased on Monday and the dollar was firm after a robust US jobs report dashed expectations of a near-term interest rate cut from the Federal Reserve.

Oil prices surged following fresh strikes on Iran-aligned factions in Iraq, Syria and Yemen by the United States, with rising tension in the Middle East keeping risk appetite in check.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.21 percent having dropped more than 1 percent earlier in the session.

European bourses looked set for a muted open, with Eurostoxx 50 futures down 0.09 percent, German DAX futures down 0.19 percent and FTSE futures up 0.07 percent.

Fed focus

Global markets have been focused on the timing of when the Fed would start cutting rates since the central bank surprised markets with its dovish tilt in December.

Traders initially priced in March as the starting point of the central bank's easing cycle but a slate of strong economic data along with resistance from central bankers have led to investors scaling back their bets on an early rate cut.

Markets are currently pricing in an 80 percent chance of the Fed standing pat on rates in March, compared with a 33 percent chance at the start of the year, the CME FedWatch tool showed. Traders are now pricing in just below 120 basis points of cuts this year.

Data on Friday showed US job growth accelerated in January and wages increased by the most in nearly two years, signs of persistent strength in the labor market that could push the Fed to start its easing cycle a bit later in the year than markets anticipated.

"I think the Fed could be concerned with the link between sticky wages and future inflation prints," said Ben Bennett, APAC investment strategist for Legal and General Investment Management. "Underlying economic activity has also been robust, so I think the Fed could be back in wait-and-see mode."

Fed Chairman Jerome Powell said the US central bank can be "prudent" in deciding when to cut interest rates, with a strong economy allowing central bankers time to build confidence inflation will continue falling.

"We have to balance the risk of moving too soon ... or too late," he said in an interview with CBS news show "60 Minutes" that aired Sunday evening in the United States.

The strong payrolls report pushed Treasury yields higher, with the yield on 10-year Treasury notes at 4.066 percent. Other regional bond yields took the cue and were higher on Monday, with yields on Australia's 10-year bond and South Korea's 10-year Treasury bond rising 11 basis points.

The dollar index, which measures the US currency against six major rivals, scaled a fresh eight-week peak of 104.18, pinning the Japanese yen near a two-month low.

US crude rose 0.42 percent to $72.58 per barrel and Brent was at $77.75, up 0.54 percent on the day as escalating geopolitical tension and its repercussions on oil supply boosted prices.