Asian markets fell and oil prices rallied Monday after the United States warned that Russia could attack Ukraine within days as tension continues to rise, while fears over inflation were also keeping traders on edge.

The losses matched a sell-off in New York and Europe on Friday as Western powers mobilize for war in Eastern Europe although Russia repeatedly denied any intention for an invasion.

Governments have told their citizens to leave Ukraine and US National Security Advisor Jake Sullivan warned last week that an invasion could begin "any day now" and would likely start with "a significant barrage of missiles and bomb attacks".

German Chancellor Olaf Scholz was preparing to visit Kyiv and Moscow to try to head off the crisis that officials said had reached a "critical" point.

The prospect of a conflict compounded to the gloomy mood on trading floors after data Thursday showed US inflation hit a forecast-busting 7.5% in January, ramping up pressure on the Federal Reserve to hike interest rates more than expected.

After sharp losses on Friday on Wall Street, the losses continued in Asia.

Tokyo and Seoul each lost more than 2%, while Hong Kong, Wellington, and Taipei were more than 1%  down. Shanghai and Singapore were also off, though Sydney and Manila edged up.

And Eli Lee, at Bank of Singapore, said the volatility that has characterized markets so far this year would likely continue.

"In the scenario of military action, we could see a spike in oil and gas prices, which would exacerbate the issue of inflation over the near term, and result in a market-wide risk-off move," he wrote in a note.

"This would inject volatility into risk assets and cause a bid for safe havens such as the Japanese yen, the US dollar and gold."

Meanwhile, oil prices jumped more than 1%, closing in on the $100 a barrel mark last seen in 2014, as investors grow increasingly worried about supplies in the event of a war -- and adding to global inflationary pressures.

The crisis comes as crude was already tight owing to a pick-up in demand as economies reopen and people return to a more normal life.

Key figures around 0230 GMT

Tokyo - Nikkei 225: DOWN 2.6% at 26,970.34 (break)

Hong Kong - Hang Seng Index: DOWN 1.5% at 24,530.06 

Shanghai - Composite: DOWN 0.4% at 3,449.99

West Texas Intermediate: UP 1.5% at $94.50 per barrel

Brent North Sea crude: UP 1.2% at $95.58 per barrel

Dollar/yen: DOWN at 115.38 yen from 115.48 yen late Friday

Euro/dollar: DOWN at $1.1350 from $1.1351 

Pound/dollar: DOWN at $1.3550 from $1.3564

Euro/pound: UP at 83.77 pence from 83.64 pence

New York - Dow: DOWN 1.4% at 34,738.06 (close)

London - FTSE 100: DOWN 0.2% at 7,661.02 (close)