Asian stocks fell, with the regional benchmark index heading for a second day of decline, after U.S. equities slumped and oil surged amid escalating violence in Iraq.

The MSCI Asia Pacific Index lost 0.3 percent to 143.92 as of 9:01 a.m. in Tokyo. The gauge is set to gain for a fifth straight week amid signs China��s economy is stabilizing and the U.S. recovery is intact. A surge in violence across Iraq, three years after U.S. troops withdrew, raised the prospect of a return to sectarian civil war in OPEC��s second-biggest oil producer.

Japan��s Topix index fell 0.7 percent as the yen held three days of gains before the Bank of Japan ends a policy meeting. South Korea��s Kospi index dropped 0.3 percent. Australia��s S&P/ASX 200 Index lost 0.1 percent and New Zealand��s NZX 50 Index slipped 0.4 percent. Markets in Hong Kong and China are yet to open.

Analysts project the BOJ will make no change today to a policy of expanding the monetary base at a pace of 60 trillion yen to 70 trillion yen per year.

Source : Bloomberg