Japan'sNikkei was the standout performer Friday in an otherwise lackluster trading session across Asian equities, as being a weaker yen and gains in international bond yields lifted shares of Japanese economic and export companies.
The Nikkei Stock Regular was trading up 0.7%, though Hong Kong's Hang Seng Index was off 0.7%, Korea's Kospi was down 0.3% and Australia's S&P/ASX 200 fell 0.2%.
Earlier Friday, the U.S. dollar breached the 105 yen level hit its highest level against the Japanese currency in nearly three months, as investors remained optimistic that U.S. interest rates will rise this year.
Meanwhile, improved monetary results from Deutsche Bank and solid post-Brexit U.K. growth helped boost risk appetite among investors, fueling selling of global government bonds. That spilled into U.S.Treasury bonds Thursday, with the U.S. 10-year yield hitting its highest level in nearly five months.
Japanese government bond yields also gained on Friday, helping drive gains in money stocks during the session. Among those, Mitsubishi UFJ Financial Group was up 1.7% and Dai-ichi Life Holdings gained 3.1%.
Shares of brokerage Nomura Holdings surged 5.2%, the best performer among Japanese companies with market capitalization of $10 billion or above. The broker on Thursday posted a 31% increase in net profit from the previous quarter, boosted by a string of high-profile deals including the initial public offering of messaging app Line Corp. Still the brokerage's shares are down over 20% year to date.
The Nikkei's gains also came despite disappointing inflation data Friday, with the core consumer price index slipping 0.5% from a year earlier in September, according to data from the Ministry of Internal Affairs and Communications.
"The CPI was weak," said Takuji Aida, chief Japan economist at Socié té Gé né rale. But there will be demand recovery next year as incomes rise amid a tight Japanese labor market, he said.
In the commodities space, oil prices were up slightly in Asia trade, after reports that members of the Organization of the Petroleum Exporting Countries told their Russian counterparts that the group would be willing to cut production by as much as 4% from peak output. The comments were made ahead of a meeting between Russia and OPEC delegates this weekend.
"We have a month to run before the much talked-about OPEC production cap details are completed, along with supporting roles of Russia and perhaps Mexico," said Stuart Ive, client manager at OM Fiscal.
"Even with Iraq asking for exemptions…and frosty relations between Saudi and Iran, money is a great healer and opener of doors," he said.
Still, the performance of Asian energy stocks was mixed, given the continued uncertainties over the completion of the reduction deal. In Australia, Oil Search Ltd. was up 2.7% and Woodside Petroleum added 1.4%. However, shares of offshore oil producer Cnooc were off 1.1% in Hong Kong though PetroChina declined 0.7%.
Among other stocks in Hong Kong and China, selling pressure continued, as investors took stock of Thursday's data that showed China's industrial profit growth slowing sharply in September.
"Confidence will still be shaken," said Alex Wijaya, market analyst at CMC Markets. The industrial data "raised the worries" about China's recovery, he said.
Among blue-chip Chinese stocks traded in Hong Kong, China Resources Power was off 2.7% and China Life Insurance declined 2.0%.
For now, traders said they would stay focused on U.S. economic data due later in the international day, and how overseas markets will react.
Hiroyuki Kachi, Takashi Nakamichi, Ese Erheriene, Jenny Hsu, Chelsey Dulaney, Kosaku Narioka contributed to this article.