SYDNEY - Asia share markets crept higher on Monday while upbeat Japanese economic growth contrasted with a weak US retail sales report to lift the yen on the dollar.

Geopolitics remained in focus with reports that talks on the Ukraine conflict will begin in Saudi Arabia this week, though the participants are not entirely clear.

The imminent threat of reciprocal US tariffs has receded until April, but the risk that they might include levies based on value added taxes in other countries was a major worry.

"The prospect, however misguided, of the US levying an additional 20 percent tariff on all EU imports, on top of whatever else it deems appropriate, and to varying degrees on all other countries who have VAT regimes is a truly terrifying prospect in terms of the implications for global growth," said Ray Attrill, head of FX research at National Australia Bank.

The Financial Times reported on Sunday that the European Commission would explore tough import limits on certain foods made to different standards in an effort to protect its farmers, echoing President Donald Trump's reciprocal trade policy.

For now, investors were just relieved that major tariffs had not already been introduced and MSCI's broadest index of Asia-Pacific shares outside Japan firmed 0.3 percent.

Tokyo's Nikkei edged up 0.2 percent after Japan reported surprisingly strong economic growth of an annualized 2.8 percent for the fourth quarter. The gains were limited by a further rise in the yen to 151.65 per dollar. South Korean shares added 0.6 percent.

The pan-European STOXX 600 index has also been attracting global funds having climbed for eight straight weeks to be up 8 percent since the turn of the year.

EUROSTOXX 50 futures held steady on Monday, while DAX futures rose 0.2 percent and FTSE futures eased 0.1 percent.

Dollar not so exceptional

A holiday in US markets made for thin trading, though the S&P 500 futures still rose 0.2 percent and Nasdaq futures 0.3 percent. Wall Street was briefly fazed by the retail sales report on Friday but the S&P 500 ended the week up 1.5 percent, while the Nasdaq gained 2.6 percent.

Treasuries rallied on the soft sales numbers as markets swung back toward pricing in two Federal Reserve rate cuts this year rather than just one.

Minutes of the Fed's last meeting are due on Wednesday and should offer some detail about the outlook for further easing, while there are at least six Fed officials due to speak.

Yields on 10-year Treasuries were holding at 4.478 percent, well off a top of 4.660 percent hit in the middle of last week.

The drop in yields undermined the dollar and left the index at 106.84 after a loss of 1.2 percent last week. The euro was firm at $1.0498 , having rallied 1.6 percent last week, and aiming to test resistance at $1.0533.

The pound held at $1.2592 ahead of a raft of UK data including employment, wages and consumer prices, which will impact market wagers on the timing of the next rate cut.

Bank of England Governor Andrew Bailey is due to speak this week and will no doubt be questioned on the outlook.

Central banks in Australia and New Zealand hold policy meetings this week and are both expected to cut interest rates, the former by 25 basis points and the latter by twice that.

In commodity markets, gold was not far from record highs at $2,899 an ounce having rallied for seven weeks straight.

Oil has had a tougher time as the prospect of peace talks on Ukraine could lead to greater supply.

Brent slipped another 12 cents to $74.62 a barrel, while US crude fell 19 cents to $70.55 per barrel.