Japan's Nikkei did not take the news well, losing 0.9 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.4 per cent with South Korea's main index down 0.6 per cent.
"Like a bad horror movie, the North Korea saga intersperses moments of calm, with occasional action to jolt you out of your chair," said ING's head of Asian research than Rob Carnell.
"But we have been here now many, many times," he added. "Unless this is the precursor to US military action, which we doubt, then in a little over a day or two, tensions will calm again, making this a good buying opportunity for investors with a strong enough nerve."
North Korea on Sunday conducted its sixth and most powerful nuclear test, which it said was of an advanced hydrogen bomb for a long-range missile, prompting the threat of a "massive" military response from the United States if it or its allies were threatened.
Speaking outside the White House after meeting with President Donald Trump and his national security team, US Defense Secretary Jim Mattis said Mr Trump asked to be briefed on all available military options.
Futures on 10-year US Treasuries climbed 5 ticks, while yields on Japanese 10-year government debt rallied to their lowest since last November.
E-Mini futures for the S&P 500 dipped 0.3 per cent, though US markets will be closed on Monday for the Labor Day holiday.
ECB meeting looms
The dollar slipped to 0.9610 Swiss francs from 0.9646, and was off 0.15 per cent against a basket of currencies at 92.674. Gold hit a 10-month high and was last up 0.6 per cent at $1,332.20.
There have been reports some at the ECB are unhappy with the euro's strength and are in no rush to signal the start of a tapering in its massive balance sheet.
Wall Street had ended last week on a mildly positive note after a tepid US jobs report kept expectations muted for another interest rate hike this year.
The Dow ended Friday with a gain of 0.18 per cent, while the S&P 500 added 0.20 per cent and the Nasdaq 0.1 per cent.
US job growth slowed more than expected in August after two straight months of hefty increases. Nonfarm payrolls increased by 156,000 last month, while economists had forecast an increase of 180,000.
On a brighter note, the Institute for Supply Management reported its factory activity index soared to 58.8 in August, the highest reading since April 2011.
That was just the latest sign that global factory growth was gaining traction and added to bullishness on industrial metals. Copper climbed 1 per cent on Monday to hit its highest in three years.
In the oil market, prices were mixed as shutdowns of US production following Hurricane Harvey were balanced by an expected downturn in crude demand as the storm knocked out refineries along the Gulf of Mexico.
Brent crude eased 29 cents to $52.46, while US crude gained 14 cents to $47.43 a barrel.
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