Renewed concerns at unrest in Egypt hit Tokyo shares and sent oil higher Thursday, while Sydney was lifted by insurance companies after a huge cyclone caused less damage than expected in Australia.
Most markets in Asia were closed for Lunar New Year holidays.
Tokyo ended 0.25 percent, or 26 points, lower at 10,431.36 after news that the anti-government protests in Egypt had turned violent, with clashes between demonstrators and pro-government forces leaving four dead.
The battles erupted after almost a week of rallies against the three-decade rule of President Hosni Mubarak.
Sentiment had improved somewhat after Mubarak said he would stand down at the end of the year but fears rose again on Wednesday as demonstrations turned violent. Overnight fighting in Cairo added to concerns.
The violence weighed on US stocks late Wednesday, with the Dow closing just 0.02 percent higher as concerns over the wider implications for the Middle East overshadowed better-than-expected private-sector US jobs growth.
Oil continued its march upwards as Egypt sits astride the strategically vital Suez Canal and at the heart of the oil-rich Middle East.
Brent North Sea crude for March delivery soared 88 cents to 103.22 in early afternoon trade in Asia and New York’s main futures contract, light sweet crude for March, climbed 65 cents to $91.51.
Ken Hasegawa, energy desk manager at Newedge brokerage in Tokyo, said: "The latest news from Egypt triggered short-covering and fresh buying from funds." He told AFP he expected Brent crude to reach $105 a barrel.
"So far there is no factor to prompt traders to sell. We don’t see any sell-out in the market at the moment," he said.
Ric Spooner, a strategist at CMC Markets in Sydney, told Dow Jones Newswires: "The situation in Egypt represents a potential economic risk.
"However, at this stage it is unclear what form any transitional government will take and whether there may be disruption to oil and gas supplies or implications for regional stability."
In Sydney shares rose 0.50 percent, or 24.1 points, to 4,820.6 amid relief that Tropical Cyclone Yasi -- described as one of the biggest cyclones to hit the country -- caused less damage than expected after slamming into Queensland’s coast overnight.
The huge storm did however devastate several towns and cut power to 175,000 homes in a state still reeling from months of catastrophic floods.
Insurance companies were the main gainers, with Suncorp up 3.05 percent.
On forex markets the euro fetched $1.3786 in Tokyo morning trade, from $1.3809 late Wednesday in New York, where it hit a near-three-month high of $1.3862.
The euro traded at 112.55 yen, down from 112.65 yen in New York, while the dollar changed hands at 81.63 yen, up from 81.54.
In other markets:
-- Manila ended 2.52 points lower at 3,888.55.
Philippine Long Distance Telephone was 0.2 percent off at 2,444 pesos and Banco De Oro Unibank rose 0.8 percent to 50.45, while San Miguel gained 6.4 percent to 179.20.
-- Wellington closed flat, edging down 2.41 points, to 3,349.89.
Fletcher Building closed 0.1 percent higher at NZ$7.91 and carpet maker Cavalier added 0.7 percent to NZ$3.10.