MSCI's broadest index of Asia Pacific shares outside Japan fell 0.6 percent, led by the materials sector. Japan's Nikkei average bucked the pan-Asia trend to hit a seven-month high, closing midday up 0.5 percent, as a weaker yen boosted battered exporters. Oil prices held near a 10-month high on Monday due to supply concerns as tensions over Iran's disputed nuclear programme worsened, while the rise in oil weakened the outlook for industrial metal demand and pushed copper futures lower. "A rise in oil prices drags the economy and weighs on growth around the world," said Bob Takai, general manager of Sumitomo Corp's energy division. "The rise in oil will have a wider global impact and a negative one and won't be contained to just the Middle East, while the European issue appears to be contained within the region," he said. Leading economies urged Europe to strengthen a firewall to fight its debt crisis if it wants more help from the International Monetary Fund, putting pressure on Germany to drop its opposition to a bigger European bailout fund. Euro zone countries, on the other hand, pledged to reassess their bailout fund in March. Euro zone powerhouse Germany said on Saturday the government will decide whether to boost the European bailout fund in March and its parliament is very likely to support any decision for more resources. "The affirmative nuance for beefing up the IMF's funding ability lit the fire on 'risk-on' trade, boosting the euro against the dollar and the yen," said Yuji Saito, director of the foreign exchange division at Credit Agricole Bank in Tokyo. "Recovery in risk positive sentiment is prompting investors to cover positions which they had shorted," he said. The euro held steady around $1.3453. The single currency rose to its highest since early December of $1.3487 on Friday. Earlier on Monday, the euro jumped to near 110 yen to a four-month high, while the dollar hit a nine-month high against the yen of 81.66 yen.