Pedestrians walk past a stock market indicator board in Tokyo. The 225-issue Nikkei Stock Average lost 164.55 points to 14,933.29 yesterday.

AFP/Tokyo

Asian shares were mixed yesterday, with initial losses recouped in some markets but gains capped by fears over the Iraq crisis that has sent oil prices to nine-month highs.

The uncertainty fuelled by insurgents who have seized a swathe of Iraq sent traders into safer assets, with the yen ticking higher against the dollar and the euro while gold also rose.

The pound touched a five-year high against the dollar on expectations the Bank of England will raise interest rates within the next six months.

Tokyo tumbled 1.09%, or 164.55 points, to finish at 14,933.29 as the strong yen hit exporters. But Sydney edged 0.13% higher, adding 7.25 points to 5,412.3, while Seoul gained 0.14%, or 2.74 points to 1,993.59.

Hong Kong was flat, edging down 18.50 points to 23,300.67. Shanghai added 0.74%, or 15.26 points, to 2,085.98 following more upbeat data on the world’s number two economy last week.

In other markets, Bangkok rose 1.09%, or 15.83 points, to 1,471.85; coal producer Banpu slipped 0.83%, or 0.25 baht, to 29.75 while Bangkok Bank added 0.26%, or 0.50 baht, to 193.50 baht. Jakarta lost 0.84%, or 41.20 points, to close at 4,885.46; Asia Pacific Fibers fell 2.86% to 68 rupiah, while palm oil producer Astra Agro Lestari gained 0.47% to 26,600 rupiah.

Kuala Lumpur fell 0.27%, or 5.16 points, to close at 1,876.74; AirAsia ended 2.9% lower at 2.33 ringgit while Genting shed 1.4% to 10.06 ringgit. British American Tobacco added 1.5% to 65.96 ringgit.

Manila slipped 0.39%, or 26.50 points, to 6,758.45.

Taipei was flat, edging up 6.54 points to 9,202.93; Taiwan Semiconductor Manufacturing Co was 0.81% higher at Tw$124.0, while Cathay Financial Holding added 0.43% to Tw$46.55.

Singapore closed down 0.09%, or 2.99 points, at 3,290.26; DBS bank eased 0.18% to Sg$17.10 while real estate developer Capitaland also dipped 1.86% to Sg$3.17.

Wellington rose 0.16%, or 8.29 points, to 5,178.80; Chorus gained 0.29% to NZ$1.72 and Fletcher Building was off 0.45% at NZ$8.83. Investors are nervously tracking events in Iraq as Islamic militants sweep though the country, taking over key cities and moving towards Baghdad as the US-trained Iraqi army crumbles.

US President Barack Obama has raised the prospect of air strikes on the militants, saying his national security team is “looking at all the options”. But while an aircraft carrier group has been deployed to the Gulf, he has ruled out any return of combat troops. Washington is also preparing to hold talks with Iran to try to resolve the crisis, a report said, as the US condemned a “horrifying” massacre by Islamic militants of hundreds of Iraqi soldiers.

On Wall Street Friday the Dow rose 0.25%, the S&P 500 added 0.31% and the Nasdaq put on 0.30%. However, the indexes were all lower over the week. Oil prices were mixed after surging last week on concerns about supplies from Iraq, a key exporter. In afternoon trade US benchmark West Texas Intermediate rose 44 cents to $107.35, its highest since September. Brent crude was down 48 cents at $113.02.

In foreign exchange trade the dollar dropped to 101.90 yen from 102.04 yen in New York Friday, while the euro was at 137.80 yen against 138.16 yen.

The single currency was also at $1.3523 compared with $1.3538.

The pound broke $1.70 for the first time since August 2009. The jump to $1.7012 came after two sessions of rises since BoE governor Mark Carney on Thursday hinted that the bank could soon tighten monetary policy as the economy shows signs of improving.

Some analysts are speculating that rates will be raised before the end of the year.

While attention turns to events in the Gulf, traders will be closely watching a US Federal Reserve meeting that ends on Wednesday, looking for a fresh handle on the world’s largest economy.