Asian markets traded lower early on Monday as investors kept an eye on political developments in the U.S. after a government shutdown began last week. Meanwhile, the euro and pound both traded higher following weekend political moves.

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NSE

Japan's Nikkei 225 hovered around the flat line in the early going. Automakers were mixed: Toyota declined 0.66 percent while Mitsubishi Motors tacked on 1.04 percent. Technology stocks traded mostly higher, with Sony rising 1.09 percent and SoftBank Group advancing 0.71 percent.

Meanwhile, South Korea's Kospi declined 0.54 percent as index heavyweight Samsung Electronics fell 2.11 percent in early trade. Other technology stocks also declined, with chipmaker SK Hynix declining 1.77 percent and LG Display slipping 0.49 percent.

The manufacturing, finance and retail sectors traded lower for the most part, with steelmaker Posco losing 2.72 percent and Lotte Shopping edging lower by 0.43 percent.

Down Under, the S&P/ASX 200 gave up gains seen earlier in the session to trade lower by 0.07 percent. The heavily-weighted financials sector declined 0.51 percent, weighing on the broader index. Shares of Commonwealth Bank sank 1.1 percent, underperforming other banking names in the morning.

National Australia Bank, another of the country's "Big Four" banks, is reportedly considering spinning out its wealth arm for a potential listing, the Australian Financial Review reported, citing sources. NAB shares were lower by 0.41 percent.

Stateside, the U.S. government shutdown continued for a second day yet there were some signs of progress on Sunday, with Republicans appearing unified over plans to end the impasse with a temporary solution. Democrats, however, want an immigration agreement in place before they support a spending plan.

"The shutdown in the U.S. looks set to dominate market attention this week. It is likely to result in plenty of noise, but no dramatic shifts in trends," ANZ Research said in a morning note.

U.S. futures tracked lower on Monday, with Dow Jones industrial average futures last declining by 49 points. On Friday, stocks had closed in positive territory as earnings season rolled on.

Currency watch

Against the yen, the dollar traded at 110.70 — below levels around the 111 handle seen on Friday. The dollar index, which tracks the dollar against a basket of six currencies, traded at 90.529.

The euro rose after Germany's Social Democrats agreed to embark on formal coalition negotiations with Chancellor Angela Merkel's government following a weekend party vote. The common currency pared some gains to trade at $1.2251 at 8:09 a.m. HK/SIN after climbing as high as $1.2274 earlier.

French President Emmanuel Macron's weekend comments were also in focus for currency markets. Macron said the U.K. could have a bespoke arrangement with the European Union following Brexit, although London would not have the same degree of access to the bloc if the U.K. left the single market, Reuters reported. The pound last traded at $1.3884.

What's on tap

Monday's economic calendar is fairly light (all times in HK/SIN):

11:30 a.m.: Thailand trade data

4:00 p.m.: Taiwan unemployment

Central banks, meanwhile, will be in focus this week as the Bank of Japan convenes a two-day monetary policy meeting beginning Monday. No major changes are expected.

In Europe, the European Central Bank is set to make its interest rates decision on Thursday.