Asian stock markets fell back and oil prices rose after US President Donald Trump said the US will block the Strait of Hormuz, after ceasefire negotiations between Washington and Tehran collapsed over the weekend.
Hong Kong and Tokyo finished in the red, while Shanghai inched into the green. Other regional exchanges largely declined, with Bangkok closed on holiday.
In Japan, the Nikkei 225 opened lower and could not recover, finishing off 0.7% as traders weighed rising oil prices.
Brent crude traded near $103 a barrel, up 8% from Friday. About 40% of oil consumed in the Asian Pacific passes through the Persian Gulf.
The benchmark Nikkei 225 fell 421.34 to 56,502.77, as losing issues outnumbered gainers 157 to 63.
Leading the upside was advertising-PR shop Dentsu, gaining 10.1%, while plumbing-fixtures maker Toto declined 7.2%.
In other news, the Japanese national government approved another $4 billion of funds to state-backed Rapidus for R&D on advanced chips, bringing the total to over $14 billion in assistance, as Tokyo seeks reliable supply of semiconductors, reported The Mainichi newspaper.
In Hong Kong, the Hang Seng Index opened lower and traded sideways, closing down 0.9% as traders weighed Persian Gulf turmoils.
The broad gauge Hang Seng fell 232.69 to 25,660.85, as losing issues outnumbered gainers 64 to 22. The Hang Seng TECH Index lost 0.8% on the day, while the Mainland Properties Index fell 0.5%.
Leading the upside was EV-maker BYD, gaining 5% on reports of strong sales, while JD Health International declined 9.4%.
On the mainland, the Shanghai Composite rose 0.1 % to 3,988.56.
On the other regional exchanges, the S. Korean KOSPI fell 0.9%; the Taiwan TWSE inclined 0.1%; the Australian ASX 200 declined 0.4%, and the Singapore Straits Times Index fell 0.1%. In late trading in Mumbai, the Sensex was down 1%
The MSCI All Country Asia Pacific Index fell 0.9% on the day.