that has sent oil prices to nine-month highs.
The uncertainty fuelled by the insurgents who have seized a swathe of Iraq sent traders into safer assets, with the yen ticking higher against the dollar and the euro on Monday 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 per cent, or 164.55 points, to finish at 14,933.29 as the strong yen hit exporters.
However, Sydney edged 0.13 per cent higher, adding 7.25 points to 5412.3, while Seoul gained 0.14 per cent, or 2.74 points, to 1993.59.
Hong Kong was flat, edging down 18.50 points to 23,300.67. Shanghai added 0.74 per cent, or 15.26 points, to 2085.98 following more upbeat data on the world's number two economy last week.
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 raised the prospect of air strikes on the militia, 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 Sunday a "horrifying" massacre by Islamic militants of hundreds of Iraqi soldiers.
On Wall Street Friday the Dow rose 0.25 per cent, the S&P 500 added 0.31 per cent and the Nasdaq put on 0.30 per cent. 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 $US107.35, its highest since September. Brent crude was down 48 cents at $US113.02.
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 $US1.3523 compared with $US1.3538.
The pound broke $US1.70 for the first time since August 2009. The jump to $US1.7012 came after two sessions of rises since governor Mark Carney on Thursday hinted that the BoE 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.
The price of gold, a safe haven commodity, switched upwards, fetching $US1,281.90 an ounce at 0800 GMT on Monday compared with $US1,272.04 late Friday.
In other markets:
-- Taipei was flat, edging up 6.54 points to 9202.93.
Taiwan Semiconductor Manufacturing Co. was 0.81 per cent higher at Tw$124.0, while Cathay Financial Holding added 0.43 per cent to Tw$46.55.
-- Wellington rose 0.16 per cent, or 8.29 points, to 5178.80.
Chorus gained 0.29 per cent to NZ$1.72 and Fletcher Building was off 0.45 per cent at NZ$8.83.
-- Manila slipped 0.39 per cent, or 26.50 points, to 6758.45.
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