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Asian shares shrugged off early losses and edged higher on Monday, while the Australian dollar was under pressure after no clear winner emerged from a weekend election.

According to ILNA, activity across much of the region was subdued ahead of the U.S. Independence Day holiday, when financial and commodity markets will be closed.

Investors also continued to take stock of the potential financial market and economic fallout from the Brexit vote after days of volatile trade that followed in its wake.

While Australian politics usually have a muted impact on broader markets, the vote count so far suggests possible policy paralysis ahead which could pose a threat to the country's triple A credit rating.

But both Australian shares and the country's currency turned higher after Moody's Investors Service said short-lived political uncertainty would have limited implications for the country's coveted triple-A credit rating.

MSCI's broadest index of Asia-Pacific shares outside Japan MIAPJ0000PUS was up 0.5 percent, after Wall Street logged its fourth straight day of gains on Friday. Japan's Nikkei stock index N225 added 0.3 percent.

Australian shares also clawed their way out of negative territory and rose 0.3 percent.

But some analysts say it might hint at future policy easing in the wake of Brexit, which roiled financial markets and raised fears about a further blow to fragile global growth.

"The possibility of a hung Parliament (with possible ratings outlook implications) and the risks that we see an easing bias reinstated in the RBA statement on Tuesday due to Brexit and a deteriorating global outlook suggest that the Australian dollar should trade on the back foot," strategists at Westpac said in a note.

The U.S. dollar took a breather ahead of the holiday, with the dollar index steady at 95.630 DXY, but it remained pressured by a fall in U.S. Treasury yields on Friday that saw the benchmark 10-year US10YT=RR yield briefly touch a four-year nadir.

Crude oil prices built on Friday's surge and extended gains on Monday in Asia, bolstered by the Saudi energy minister's view that the oil market is heading towards balance.

Asian stocks Australian dollar Brexit