(Updates with closing prices)

By Rocky Swift

TOKYO, March 16 (Reuters) - Japan's Nikkei share average

closed in the red on Monday for a third consecutive day, as the

Middle East crisis raised concerns about longer-term economic

damage from higher energy prices and a weaker yen.

The benchmark Nikkei 225 Index edged 0.1% lower to

close at 53,751.15, after earlier falling as much as 1.3%. The

broader Topix slid 0.5% to 3,610.73.

The Nikkei has lost almost 9% since the start of U.S. and

Israeli air strikes on Iran more than two weeks ago, as the

conflict spread into neighbouring countries and paralysed

shipment of petroleum through the Strait of Hormuz.

Shares briefly turned up after U.S. President Donald Trump

said he is urging other countries to help safeguard shipping

routes.

Japan does not currently plan to dispatch naval vessels to

escort ships in the Middle East, Prime Minister Sanae Takaichi

said. Meanwhile, Finance Minister Satsuki Katayama said the

government is prepared to take decisive steps in financial

markets, as the yen sank close to the psychologically important

160-per-dollar line.

The market seems to be growing increasingly concerned about

stagflation, where economies are gripped by simultaneous

increases in inflation and declines in growth, said Maki Sawada,

an equities strategist at Nomura Securities.

"Concerns about an economic slowdown due to rising oil

prices are being factored in," Sawada said. "Rather than a

general selloff today, we are seeing a trend where these

domestic demand sectors are performing firmly and underpinning

the Japanese stock market."

There were 65 advancers on the Nikkei index against 154

decliners. The largest gainers in the index were Ibiden ( IBIDF )

, up 3.8%, followed by Screen Holdings ( DINRF ), which

advanced 3.7%.

The largest losers were utility Tokyo Electric Power ( TKECF )

, down 4.8%, followed by Isuzu Motors ( ISUZF ), which

fell 4.4%.