(MENAFN- AFP) Most Asian markets headed into the weekend on a dour note following a Wall Street sell-off Friday, but Japanese stocks were again boosted by a weaker yen as another feeble inflation reading put fresh pressure on Tokyo.
The dollar extended gains in Tokyo after breaking 105 yen Thursday on increasing expectations the Federal Reserve will lift interest rates by year's end, helping Japan's exporters.
Rate hike talk comes as analysts suggest years of cheap borrowing are nearing an end, a point reinforced by a surprise jump in British economic growth that shattered any chance of another Bank of England cut.
That has in turn put upward pressure on bond yields from the US to Australia as traders shift out of the ultra safe investments to seek better returns. Bond yields go up as prices go down.
"We are seeing a shift, with global central banks unlikely to provide additional stimulus and that's driving bond yields higher and is strengthening the US dollar," Niv Dagan, Melbourne-based executive director at Peak Asset Management LLC, told Bloomberg News.
The dollar's gains were cemented Friday by news that Japanese consumer prices fell for a seventh straight month, which Michinori Naruse, an analyst at Japan Research Institute, told AFP meant "the Bank of Japan has no choice but to delay the deadline of the (two percent inflation) target".
While the greenback dipped slightly against the pound and euro, it kicked on against most other higher-yielding Asia-Pacific currencies with the South Korean won 0.2 percent lower, Australia's dollar 0.6 percent off and the Malaysian ringgit down 0.3 percent.
The weaker yen lifted the Nikkei, which ended 0.6 percent higher.
But Shanghai closed down 0.3 percent while Hong Kong lost one percent in late trade.
Sydney fell 0.3 percent, Seoul shed 0.2 percent and Singapore was 0.5 percent lower. Manila retreated 1.6 percent while there were also losses in Jakarta and Bangkok.
Oil markets were subdued after Thursday's bounce but worries over Iraq and Russia's comments about being exempt from a planned output cut fed anxiety.
"Oil managed a tepid bounce in New York trading as Saudi rhetoric about cutting OPEC production by four percent put a temporary floor under WTI and Brent," Jeffrey Halley, senior market analyst at OANDA, said in a note.
But he added that "the onus will fall on Saudi Arabia to pull any deal together".
- Key figures around 0700 GMT -
Tokyo - Nikkei 225: UP 0.6 percent at 17,446.41 (close)
Hong Kong - Hang Seng: DOWN 1.0 percent at 22,890.73
Shanghai - Composite: DOWN 0.3 percent at 3,104.27 (close)
Pound/dollar: DOWN to $1.2164 from $1.2166 Thursday
Euro/pound: UP to 89.69 pence from 89.57 pence
Euro/dollar: UP to $1.0910 from $1.0898
Dollar/yen: UP to 105.39 yen from 105.20 yen
Oil - West Texas Intermediate: DOWN three cents at $49.69 per barrel
Oil - Brent North Sea: FLAT at $50.47
New York - Dow: DOWN 0.2 percent to 18,169.68.10 (close)
London - FTSE 100: UP 0.4 percent at 6,986.57 (close)
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