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Wal-Mart has 371 stores and 43 deli outlets in Japan, of which 24 were affected by the March 11 earthquake and tsunami that left more than 27,000 people dead or missing across Japan's devastated northeast.

Of Wal-Mart's affected stores, two were severely hit and were completely covered by mud, said Wal-Mart Asia's Vice President of Corporate Affairs, Anthony Rose.

The remaining 22 affected stores managed to operate out of parking lots in some form within hours of the disaster, and were giving away bottled water and items such as noodles while selling some limited items, Rose said.

Wal-Mart said the 12 returning to full operations on Monday are located in Sendai City and in a suburb of Sendai. The other 12 will reopen as soon as possible, said Rose, who is based in Hong Kong.

"Wal-Mart has a lot of experience of dealing with disasters learning from the earthquakes in china, Chile and also the Katrina disaster to name a few," said Scott Price, president and CEO of Wal-Mart Asia in a statement emailed by Rose.

"Within minutes of the earthquake in Japan, we activated our emergency operations center in Bentonville and command centers in Tokyo and Hong Kong," Price said in the statement.

(Editing by Vinu Pilakkott)

European shares .EU also were set to dip in early trade, though U.S. stock index futures pointed to a possibly firmer opening on Wall Street later in the day.

Investors in Asia booked profits on bank shares in Hong Kong, computer maker stocks in Taiwan and in mining shares in Australia, weighing on the region's equity markets after those sectors racked up solid gains over the last week.

However, most analysts reckoned Asian stock markets would bounce back on foreign demand after the first quarter and Japan's fiscal year comes to a close later this week.

"There's still room to rise as foreign buying on dips is likely to continue, although trading may be directionless before the end of the fiscal year," said Hajime Nakajima, a wholesale trader at Cosmo Securities in Tokyo.

Japan's Nikkei .N225 finished down 0.6 percent. Shares elsewhere in Asia were mainly weaker, with MSCI's index of Asian shares outside Japan .MIAPJ0000PUS easing 0.4 percent.

GERMAN ELECTION HURTS EURO

Merkel's Christian Democrats lost power on Sunday in the rich state of Baden-Wuerttemberg, where a rush of anti-nuclear sentiment following Japan's nuclear crisis mobilized voters against the party, which has been supportive of nuclear power.

The loss of the regional stronghold could limit Merkel's ability to pass legislation as her coalition center-right government deals with nuclear power, military action in Libya and the euro zone debt crisis.

While erosion of Merkel's clout at home weighed on the euro, prospects of a European Central Bank rate was an important element holding up the single currency, Gibbs said.

"Clearly risks are rising, but not sufficient to tip the euro over the edge yet. There's also a range of support on the way down, it's not going to collapse even if it falls through $1.40," said Greg Gibbs, a strategist at RBS in Sydney.

The euro last traded at $1.4061, compared with $1.4065 late in New York on Friday. Early in the session, it was marked down to around $1.4020.

Along with its gains versus the euro, the dollar firmed against the yen, helped by Friday's comments from a U.S. central bank official who said the Federal Reserve is poised in the "not-too-distant future" to begin rolling back its super loose monetary policy to avert inflation.

Easier U.S. policy has helped boost global financial markets by flooding them with cheap money in search of higher returns, though it has also added to inflationary pressures in emerging economies.

The U.S. dollar last traded at 81.70 yen, up from 81.43 late Friday in New York.

But worries about Japan, the Middle East and oil prices will persist and keep uncertainty high, analysts said, even as the VIX, the CBOE Volatility Index .VIX, slid 27 percent over the past week.

Another driver could come from economic data, with the U.S. government's March payrolls report -- the most widely watched economic indicator of the month -- due on Friday.

Economic data lately has taken a backseat to geopolitical events, with Japan's massive earthquake and tsunami sparking fears of a nuclear disaster in the country and driving the most recent pullback in stocks.

But many expect window dressing, where fund managers sell stocks with big losses and buy ones with big gains to spruce up their portfolio's quarterly performance, to dominate trading.

"I think a number of people viewed the harshness of the sell-off as an opportunity to pick up some inappropriately punished stocks," said Michael Strauss, chief economist of Wilton, Connecticut-based Commonfund.

The strategy contributed to a bounceback late last week, with the Dow Jones industrial average .DJI and Nasdaq .IXIC posting their best weeks since July. The benchmark Standard & Poor's 500 .SPX had its best week since early February.

Analysts say the stock market's recent performance has been strongly influenced by expectations for the upcoming earnings reporting period, which kicks off the second week of April.

Oracle's upbeat outlook late Thursday and its stock's 1.6 percent rise on Friday is one example of that, while the energy sector has benefited from the view that the run-up in oil prices will mean stronger-than-anticipated results for producers and refiners.

KING OIL

Energy, up about 14 percent since the start of the quarter as measured by the S&P energy index .GSPE, is by far the sector with the biggest gains for the quarter to date.

Brent crude oil prices are trading at $115 a barrel, just off recent 2 1/2-year highs, as Western powers last weekend launched a military campaign in oil producer Libya and unrest escalated in other countries, including Yemen and Bahrain.

While higher oil prices are seen as an overall drag on the global economy, they boost the earnings and shares of energy companies.

"If they're able to sell oil at anywhere near the spot prices, they should post a really good quarter, and we're already seeing that in the stock prices," said Fred Dickson, chief market strategist of D.A. Davidson & Co. in Lake Oswego, Oregon.

Marathon Oil (MRO.N), up about 40 percent for the quarter to date, has the fourth-best gain in the S&P 500 for the last three months, and energy companies dominate the quarter's top performers. El Paso Corp (EP.N) is up 31 percent and Valero Energy (VLO.N) is up 30 percent.

Jobs are considered a lagging indicator. They typically recover many months after the economy comes out of a recession, and this cycle was no exception. So will troubles in Japan, Libya and elsewhere push up U.S. unemployment later this year?

"The U.S. economy is headed for another soft patch brought on by the double shock," said IHS Global Insight chief economist Nariman Behravesh, referring to Japan and upheaval in the oil-producing Arab world.

Assuming oil prices stabilize and Japan's reconstruction and recovery begin in the next few months -- as most economists currently expect -- Behravesh says the soft patch will likely be short-lived. If he's right, the impact on the labor market should be minimal.

Friday brings the March employment report, and economists polled by Reuters are looking for growth of about 188,000 jobs, with the unemployment rate holding steady at 8.9 percent.

This employment report carries a bit more uncertainty than usual because it arrives before some of the early indicators economists rely on to fine-tune their forecasts.

Normally, the jobs report is released after the monthly Institute for Supply Management readings on manufacturing and services, both of which contain employment measures.

Not so this time.

The ISM manufacturing survey comes out on Friday, about 90 minutes after the jobs data, and the services report won't be released until the following week.

That leaves Thursday's weekly jobless claims report as the best guide, and the trend there has been "heartening," said Deutsche Bank economist Brett Ryan.

He said payrolls historically have not turned significantly higher until weekly jobless claims broke below the 400,000 barrier. The four-week moving average, which smooths out weekly volatility, has been below that threshold in four of the past five weeks.

That makes him a bit more optimistic than most about Friday's employment figures. He thinks they will show a gain of 200,000 jobs, with the unemployment rate dipping to 8.8 percent

JOBS TRUMP OIL?

Even with the benefit of all the early clues, economists have not had much success in predicting the jobless rate in recent months. It has fallen by more than expected in each of the prior three months, coming down nearly a full percentage point since November. Indeed, the labor market has been among the few positive surprises lately.

Paul Ashworth, an economist with Capital Economics in Toronto, said the U.S. economy "appeared to have everything going for it headed into the new year" before the run-up in food and energy prices and the Japanese earthquake.

The two will be speakers at an event set for Wednesday at the U.S. Chamber of Commerce, the country's largest business lobbying group, in its Corinthian-columned headquarters situated within view of the White House.

Warren, 61, is an earnest Harvard Law School professor brought up in Oklahoma, while Dimon, 55, is a consummate New York City insider and one of Wall Street's richest CEOs.

He was once a close adviser to President Barack Obama on financial regulation policy, but has become a vocal critic of the administration's efforts, especially since passage in 2010 of the Dodd-Frank Wall Street reforms.

She is helping the administration set up the Consumer Financial Protection Bureau (CFPB), a watchdog called for by Dodd-Frank to shield consumers from abusive practices in the mortgage and credit card businesses.

The remarks by Warren and Dimon will generate headlines, although analysts said other financial regulation news this week will have more impact on banks and the markets.

"The big event next week in Washington is the long-anticipated release of the rules implementing the Dodd-Frank risk retention requirement," said Brian Gardner, a senior policy analyst at investment firm Keefe Bruyette & Woods.

Under Dodd-Frank, mortgage lenders that sell loans as securities -- a practice known as securitization -- must keep at least 5 percent of the credit risk on their books.

The measure, requiring lenders to have "skin in the game", is meant to help restore lending discipline that went out the window during the securitization-fueled real estate boom at the root of the 2007-2009 financial crisis.

The Federal Deposit Insurance Corp will hold a meeting on Tuesday to consider a risk-retention rule proposal, as well as a related measure to allow some exemptions.

LIVING WILLS

The FDIC will also consider a proposal on living wills for large banks and financial firms, another Dodd-Frank measure. Such wills are meant to tell regulators how to shut down an institution on the brink of collapse in an orderly way, averting the need for bailouts or bankruptcies.

Less than three years after taxpayers rescued Wall Street and the big banks from their worst crisis since the Great Depression, bank executives, the chamber and many Republicans in Congress are on the attack against Dodd-Frank.

Another committee hearing on Wednesday in the House of Representatives will give Republicans a platform to question Dodd-Frank and the costs of complying with it. The reforms were pushed through Congress last year by Democrats over the opposition of Republicans and bank lobbyists.

The same lobbyists are now trying to weaken Dodd-Frank at the agency implementation level, while Republicans seek to cut the budgets of agencies putting the reforms into practice, and offer bills to repeal or amend parts of it.