Asian stocks lost steam amid choppy trade early Friday, mirroring the lackluster lead from Wall Street overnight.
The Dow Jones Industrial Average (.DJI) closed down 0.5 percent, with Caterpillar (CAT) down 6.3 percent on news that the firm will cut up to 5,000 jobs by end-2016 and lowered guidance. The S&P 500 (.INX) eased 0.3 percent while the tech-heavy Nasdaq Composite (.IXIC) more than halved losses in the afternoon trading session to finish 0.4 percent lower.
In a speech that occurred after the market close, Federal Reserve chair Janet Yellen said that an interest-rate hike "sometime later this year" would likely be appropriate, though the decision hinges on economic data. Yellen was speaking at the University of Massachusetts on Thursday.
The greenback jumped against a basket of currencies after the speech. The euro (EURUSD=) fell about 0.5 percent to $1.1174 from around $1.1230 while dollar-yen (JPY=) rose to around 120.27, from around 120.00 before Yellen's remarks.
Nikkei slips 0.3%
Japan's Nikkei 225 (.N225) gave up all of its gains in early trade, as investors reacted to data that showed consumer inflation fell for the first time since April 2013.
The core consumer prices dropped 0.1 percent in August, government data released before the market open showed, underscoring the need for policymakers to offer fresh fiscal and monetary support to bolster a fragile recovery.
"CPI data continues to show a weak acceleration, which suggests that the Japanese central bank may need to do more. That said, the Bank of Japan's massive 80 trillion yen QQE programme is showing signs of crowding out the Japanese Government Bond (JGB) markets," IG's Singapore-based market strategist Bernard Aw wrote in a note released early Friday.
"If the BOJ cannot increase its asset purchase programme, it will have to explore other options, such as cutting the reserve requirement ratio, or expand its sovereign bond purchases to regional bonds," Aw added.
A weaker yen failed to sustain risk appetite for export-oriented stocks. Carmakers turned negative, with Honda (7267.T-JP) down more than 1 percent and blue-chip Toyota Motor (7203.T-JP) eased 0.2 percent. Sharp (6753.T-JP) plunged 9 percent after the Nikkei business daily reported the company is likely to book a 30 billion yen loss for the April-September half.
In other news, Prime Minister Shinzo Abe that he has set out three new goals for "Abenomics" and will target a 20 percent increase in gross domestic product (GDP).
"The Japanese recovery is flagging and authorities are concerned that they are losing momentum and they are trying to restore confidence in the medium term despite the near-term performance," Steven Englander, global head of G10 FX Strategy at Citibank, told CNBC.
Mainland indices flat
China's Shanghai Composite (.SSEC) clawed back modest losses to hover just a tad below the flatline at 10.00am local time.
Among China's other indexes, the CSI300 Index and the smaller Shenzhen Composite ticked down 0.1 and 0.3 percent respectively.
In Hong Kong, the Hang Seng (.HSI) index stayed near the previous day's close.
ASX slips 0.2%
Australia's S&P ASX 200 (.AXJO) index pared gains by mid-morning trade, weighed down by a change in direction among the major lenders.
Commonwealth Bank of Australia (CBA-AU) tanked 1.1 percent, while National Australia Bank (NAB-AU), Australia and New Zealand Banking (ANZ-AU) and Westpac (WBC-AU) receded between 0.4 and 1 percent.
But gold producers held up; Evolution Mining (EVN-AU) and Newcrest Mining (NCM-AU) leaped more than 3 percent each, thanks to a firmer gold prices for the second straight session overnight.
Myer (MYR-AU) also outperformed the bourse with a rise of 3.9 percent, while Harvey Norman (HVN-AU) and JB Hi-Fi (JBH-AU) climbed 0.6 percent each.
Kospi drops 0.7%
South Korea's Kospi (.KS11) index surrendered early gains to head south in early trade, touching its lowest level since September 15.
Losses in heavyweight components likely dragged down the bourse; Samsung Electronics (593-KR) and Posco (549-KR) fell 0.6 and 1.4 percent respectively.
However, Hyundai Motor (538-KR) surged 2.5 percent on the back of news that its vice chairman and heir-apparent Chung Eui-sun bought shares worth about 500 billion won (KRW=) ($420 million).
Chung, 44, the only son of Hyundai Motor's chairman Chung Mong-koo, now holds about 1.4 percent of Hyundai Motor after buying 3.16 million shares from Hyundai Heavy Industries, reported Reuters citing a regulatory filing. "It could be taken as Chung Eui-sun's step in earnest toward succession of the ownership structure,"Park Ju-gun, head of research firm CEO Score, told the newswire.
Shares of SK Telecom (1767-KR) notched down 0.8 percent, reversing a positive start, after announcing on Thursday that it will buyback 523 billion won ($438.21 million) worth of its own shares.
Rest of Asia
Taiwan's weighted index edged down 0.4 percent amid choppy trade, tracking the downbeat sentiment region-wide and as investors weighed the central bank's decision to lower its benchmark discount rate to 1.750 percent from 1.875 percent, citing the slowdown in global economic growth. This marks the Central Bank of the Republic of China's (CBC) first rate cut since 2009, sending the local currency to a six-year low of 33.285 versus the U.S. dollar in the previous session.
Meanwhile, the central bank guided the overnight interbank rate lower on Friday, lowering it to 0.30 percent from 0.32 percent a day earlier.
"While the description of the domestic economy didn't contain any new information or forecasts, the contrast with the description in the June statement underscored the deterioration that occurred in the second quarter. We blame an adverse export shock emanating principally from the U.S. and China," ING Financial Markets' head of research Asia, Tim Condon, wrote in a note.
Elsewhere in the region, Singapore awaits industrial production data due at 1pm local time, which Moody's said could continue to suggest the possibility of a technical recession and the need for monetary easing.
Industrial output is expected to fall 4.8 percent in August from a year earlier, a Reuters poll said, better than the 6.1 percent drop in the preceding month. However, on a month-on-month basis, output is forecast to have slipped 0.1 percent, down from the 1.0 percent rise in July.
Singapore's economy grew 1.8 percent in the second quarter, slightly beating an earlier estimate of 1.7 percent but significantly down from the first quarter's 2.8 percent expansion, on the back of a sluggish manufacturing sector. The advance estimate of Singapore's gross domestic product (GDP) in the third quarter will be announced on October 14.
In early trade, the benchmark Straits Times (.STI) index declined 0.5 percent to hover near a one-month trough.
Meanwhile, markets in India and the Philippines are closed for public holidays.
