Most Asian markets struggled Tuesday, with traders spooked by geopolitical concerns following deadly attacks in Europe, but Tokyo's Nikkei returned to winning ways.

The euro retreated against the dollar after at least 12 people were killed and dozens injured late Monday when a lorry was driven into a packed Berlin Christmas market in what police said was a probable terrorist attack.

That came after an off-duty policeman shot dead Russia's ambassador to Turkey in Ankara, prompting a vow from President Vladimir Putin to step up the fight against "terrorism". Also Monday, three people were hurt in a gun attack on a mosque in Zurich.

The incidents led to a promise by US President-elect Donald Trump to wipe "terrorists" off the face of the Earth.

"There are some investors who might see something like the assassination in Turkey and the potential terror attack in Berlin as opportunities to lock in profits with a couple of weeks left in the year," Philip Orlando, chief equities strategist at Federated Investors in New York, told Bloomberg News.

International tensions also rose last week after China seized an unmanned US sea survey probe from international waters in the South China Sea.

That sparked a rebuke from Trump, raising fears about future US ties with China. The tycoon has already hit out at Beijing in recent weeks over several issues from Taiwan to trade.

The drone has now been returned.

- Dollar back up -

Hong Kong closed down 0.5 percent and Shanghai also ended down 0.5 percent, with mainland Chinese investors fretting over a weakening yuan and rising bond yields.

Manila shed 1.6 percent, Jakarta fell 0.3 percent and Kuala Lumpur lost 0.2 percent while Bangkok and Mumbai were also well down.

However, Tokyo ended 0.5 percent higher after the Bank of Japan held fire on its stimulus but gave an upbeat view of the world's number-three economy as exports pick up on the back of a weaker yen. 

The Nikkei had fallen slightly Monday after a nine-day rally.

Sydney added 0.5 percent and Seoul gained 0.2 percent, while Taipei and Wellington were flat.

The yen has fallen more than 17 percent against the greenback since Trump's shock US presidential election win in November fanned speculation that his plans for big government spending and tax cuts would force the Federal Reserve to raise borrowing costs.

In forex trade Tuesday the yen gave up initial gains, falling back towards 118 to the dollar.

The greenback continues to push higher after the Federal Reserve's interest rate rise last week and indications of three more rises next year.

The euro bought $1.0385, struggling to emerge from a downward spiral that could see it hit parity with the greenback for the first time since late 2002.

In early European trade Paris was flat, Frankfurt shed 0.1 percent and London gave up 0.2 percent.

- Key figures around 0800 GMT -

Tokyo - Nikkei 225: UP 0.5 percent at 19,494.53 (close)

Hong Kong - Hang Seng: DOWN 0.5 percent at 21,729.06 (close)

Shanghai - Composite: DOWN 0.5 percent at 3,102.88 (close)

London - FTSE 100: DOWN 0.2 percent at 7,000.74

Euro/dollar: DOWN at $1.0385 from $1.0403 Monday

Dollar/yen: UP at 117.95 yen from 117.18 yen 

Pound/dollar: DOWN at $1.2375 from $1.2399

Oil - West Texas Intermediate: DOWN 21 cents at $51.91 per barrel

Oil - Brent North Sea: DOWN eight cents at $54.84

New York - Dow: UP 0.2 percent at 19,883.06 (close)