Russian President Vladimir Putin warned on Sunday that further Western attacks on Syria would bring chaos to world affairs, as Washington prepared to increase pressure on Russia with new economic sanctions.
But with President Donald Trump declaring mission accomplished, investors wagered the worst had been avoided.
"Trump was able to enforce his chemical weapons red line without crossing the threshold for Russian retaliation," analysts at JPMorgan said in a note.
"Stocks were concerned about a prolonged and expanded U.S. campaign towards Assad and that doesn't look probable."
Safe-haven assets eased in response, with yields on U.S. 10-year Treasury debt up two basis points at 2.84 percent.
The dollar was a fraction firmer on the yen at 107.40 , up on last week's low around 106.62.
Dealers were keeping a wary eye on Japanese politics after a survey showed support for Japanese Prime Minister Shinzo Abe had fallen to 26.7 percent, the lowest since he took office in late 2012.
Abe's sliding ratings are raising doubts over whether he can win a third three-year term as ruling Liberal Democratic Party (LDP) leader in a September vote, or whether he might even resign before the party election.
The euro was steady at $1.2330, while the dollar index eased a touch to 89.772.
EARNINGS, CHINA GDP ON MENU
In commodity markets, gold gained 0.1 percent to $1,346.61 an ounce, but remained well short of last week's peak at $1,365.23.
Oil prices slipped with Brent crude futures off 66 cents at $71.92 a barrel, while U.S. crude fell 56 cents to $66.83 a barrel.
Looking ahead, the U.S. earnings season kicks into high gear this week with Thomson Reuters data predicting profits at S&P 500 companies increased by 18.6 percent in the first quarter from a year ago, their biggest rise in seven years.
Yet with expectations so high, bank shares ran into profit-taking on Friday after a batch of mixed results.
In Asia, China reports its gross domestic product for the first quarter on Tuesday with market forecasts clustered around growth of 6.7 percent to 6.8 percent.
The United States reports retail sales later on Monday and there are around 15 Federal Reserve speakers in the diary for the week.
Also this week, the IMF will hold its spring meetings of central bankers and finance ministers in Washington.
(Editing by Shri Navaratnam and Eric Meijer)
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