Asian shares mostly down, focus on Iraq

Hong Kong - Asian markets mostly fell on Friday, following another Wall Street sell-off as oil prices shot up to a nine-month high on concerns about the growing crisis in Iraq.

Assets considered safe options in times of uncertainty also benefited, with gold up and the yen holding on to healthy gains seen in US trade.

Investors are also awaiting the release of Chinese indicators and the end of a Bank of Japan policy meeting later in the day.

Tokyo fell 0.78%, Sydney tumbled 0.94% and Seoul sank 1.00% but Hong Kong added 0.14% and Shanghai was flat.

New York's three main indices took a hit on Thursday on news that Iraqi jihadists were pushing towards Baghdad after capturing a town to the north.

The Dow fell 0.65% and the S&P 500 lost 0.71% - both having hit record highs earlier in the week - and the Nasdaq sank 0.79%.

US President Barack Obama raised the prospect of possible air strikes when he said his national security team "is looking at all the options".

Forces from the autonomous Kurdish region took control of disputed northern oil hub of Kirkuk to protect it from attack, officials said.

Adding to the fears over more geopolitical instability is the prospect that supplies from a major oil producer could be cut off. And those worries filtered through to crude markets.

The US benchmark, West Texas Intermediate for delivery in July, jumped 81 cents to $107.34, having surged $2.13 in US trade.

Brent crude, the European benchmark, was up 54c at $113.56 after rallying $3.07 on London's Intercontinental Exchange.

On foreign exchange markets the dollar was at ¥101.78 in early trade, compared with ¥101.68 in New York trade and well off the ¥102.08 in Tokyo earlier on Thursday.

The euro was at ¥137.95 from ¥137.80 in New York but also well off the ¥138.10 yen in Asia on Thursday.

The single currency also bought $1.3554 compared with $1.3553.

"Risk-off sentiment and the threat of renewed US military involvement in Iraq... will keep investors in sell mode - or sidelined," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

With high oil prices raising the chances of a jump in inflation traders moved into gold, which is a hedge against rising prices. The precious metal was up at $1 273.95 an ounce at 02:30 GMT, compared with $1 264.20 late on Thursday.