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Hong Kong - Asia's markets were mostly lower on Wednesday as tensions in Iraq dampened buying sentiment while investors await the end of the US Federal Reserve's latest policy meeting later in the day.
The dollar held up against the yen after climbing in New York on news showing US inflation rising in May at its fastest pace in more than a year and a half.
Tokyo added 0.32%, the weaker yen helping the Nikkei to a second day of gains after sinking more than one percent on Monday.
Sydney was flat, Seoul eased 0.28% and Hong Kong dipped 0.32%, while Shanghai lost 0.11%.
With few catalysts to drive trade, investors are keeping tabs on events in Iraq as militants bear down on Baghdad after taking control of a number of towns and cities in the country.
On Tuesday, Iraq's Prime Minister Nuri al-Maliki sacked several top security commanders after government forces crumbled in the jihadist onslaught that the UN has warned risks breaking up the country.
President Barack Obama has sent troops to Baghdad to strengthen security for the US embassy and is weighing potential military options, including air strikes, to counter the rebels.
The fighting has raised fears about oil supplies from the country, a key exporter of the black gold, which is sitting at nine-month highs.
In early Asian trade US benchmark West Texas Intermediate for July delivery gained 36 cents to $106.72, while Brent crude for August eased 16c to $113.29.
The Fed will wrap up a two-day policy meeting later in the day, and while policymakers are widely expected to continue winding down their stimulus investors will be watching to see if Fed chief Janet Yellen gives any hints about future policy plans.
Of particular interest is the future of interest rates. While the bank has consistently said it will hold rates at record lows well into next year, it still faces rising inflation and a pick-up in the jobs market.
On Tuesday, data showed inflation at 2.1% in May, its highest since October 2012.
The news lifted the dollar in US trade to ¥102.13 from the ¥102.00 earlier on Tuesday in Asia.
On Wednesday in Tokyo the dollar bought ¥102.16, while the euro fetched $1.3545 and ¥138.38 against $1.3546 and ¥138.35 in New York.
The Dow rose 0.16%, the S&P 500 gained 0.22% and the Nasdaq climbed 0.37%
Gold fetched $1 270.16 an ounce at 04:05 in Asia, compared with $1 265.00 late on Tuesday.
