Despite the positive mood, trade concerns continued to linger after U.S.-China trade talks yielded no major breakthroughs. China threatened that previous trade agreements negotiated by the countries "will not take effect" if the Trump administration goes ahead with a planned tariff increase.
U.S. allies also took aim during a G-7 finance leaders meeting at metals tariffs imposed by the Trump administration.
The "flip flop stance" taken by the Trump administration may give the U.S. an advantage in trade negotiations in the near term, but will force China to adopt a tougher approach in the medium term, said Tommy Xie, head of greater China research at OCBC Bank, in a note.
"Market will continue to watch out for how President Trump wants to play his unpredictability card, which will be the new normal for global diplomatic relationships," Xie added.
The greenback held onto most gains made on the back of Friday's robust jobs report. Against the yen, the dollar traded at 109.65 at 2:42 p.m. HK/SIN.
The dollar index, which tracks the dollar against a basket of rival currencies, was slightly softer at 94.030.
On the energy front, U.S. crude futures were off by 0.05 percent at $65.78 per barrel. Brent crude futures edged down 0.29 percent to $76.57. Oil had come under pressure in the last session on the back of the firmer dollar.
In corporate news, PC maker Lenovo's removal from Hong Kong's benchmark Hang Seng Index took effect on Monday. CSPC Pharmaceutical Group, a Chinese drugmaker, replaced the computer maker as part of the index.