Asian stocks ended mixed on Monday after the United States imposed additional sanctions on Iran and rebuffed the Iraqi government's request to begin discussions on pulling out troops.
Reports of another rocket attack on an Iraqi airbase and caution ahead of the signing of a U.S.-China trade agreement this week also kept investors nervous.
Chinese Vice Premier Liu He is scheduled to visit Washington this week to sign the trade deal.
Chinese shares gained ground, with electric-vehicle makers surging after the government said it would not make significant cuts to subsidies for new energy vehicles this year.
The benchmark Shanghai Composite index jumped 23.28 points, or 0.75 percent, to 3,115.57, while Hong Kong's Hang Seng index ended up 1.11 percent at 28,954.94.
The Japanese market was closed for the 'Respect for the Aged Day' holiday.
Australian markets retreated from record highs hit in the previous session. The benchmark S&P/ASX 200 dropped 25.30 points, or 0.37 percent, to 6,903.70 as investors assessed the risks facing the Middle East in the longer term. The country's bushfire crisis also weighed on sentiment. The broader All Ordinaries index ended down 21.70 points, or 0.31 percent, at 7,020.20.
Banks finished flat to slightly lower. Mining heavyweight BHP shed 0.9 percent and rival Rio Tinto eased 0.3 percent. Energy stocks such as Woodside Petroleum, Origin Energy and Oil Search lost 1-2 percent, weighed down by weakness in global crude prices.
Gold miners bucked the weak trend to edge higher. Evolution Mining surged 2.8 percent and Norther Star Resources advanced 1.6 percent.
Seoul stocks rallied on expectations of improved Seoul-Beijing relations. The benchmark Kospi climbed 22.87 points, or 1.04 percent, to 2,229.26.
Market heavyweight Samsung Electronics rose 0.8 percent to extend gains for the fifth day amid signs of a recovery in chip prices. SK Hynix shares added 1.6 percent.
New Zealand shares gave up early gains to finish marginally lower, with Kathmandu Holdings and Goodman Property Trust falling 1-2 percent.
Malaysia's KLSE Composite index was moving down half a percent. The country's jobless rate stood at 3.2 percent in November, the same as seen in October, a government report showed. In the same period last year, the unemployment rate was 3.3 percent.
U.S. stocks pulled back from record closing highs on Friday as the latest jobs report proved to be a mixed bag.
Job growth slowed more than expected in December and wage growth dropped below 3 percent for the first time since July 2018, while the unemployment rate stayed at a 50-year low of 3.5 percent, the Labor Department's monthly report showed.
The Dow Jones Industrial Average dropped half a percent, while the S&P 500 and the tech-heavy Nasdaq Composite shed around 0.3 percent each.