Tokyo - Japanese stocks crawled to a fresh 15-year peak on Friday after the dollar surged against the yen as upbeat US data flipped expectations back in favour of an early interest rate hike by the Federal Reserve.
The rest of Asian equity markets lagged Japan after a sharp pullback in oil prices dulled risk appetite and sent Wall Street lower overnight.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3 percent, with South Korean and Australian shares posting light losses.
Tokyo's Nikkei rose 0.3 percent after touching a high not seen since June 2000, helped by a weaker yen which is seen sharpening Japanese exporters' competitiveness and boosting their earnings.
The dollar was steady at 119.36 yen after rising about 0.5 percent overnight from a low of 118.68. The dollar index hovered near a one-month high of 95.357.
Dollar bulls, disappointed earlier this week by perceived dovish signals from Fed Chair Janet Yellen, took heart again after data released on Thursday showed US core inflation rose more than expected.
Robust US durable goods orders also helped, with both sets of data driving Treasury yields higher and supporting the dollar.
Investors are now waiting on revised fourth quarter US gross domestic product data due later on Friday for another health check of the world's largest economy.
Economists polled by Reuters expected US growth in the fourth quarter to be revised down to 2.1 percent from a preliminary 2.6 percent.
“As growth in the upper range of 2 percent is the Fed's prerequisite for an early and sustained rate hike, a figure just around or below 2 percent is likely to hurt expectations for a June hike and weigh on the dollar,” said Masafumi Yamamoto, market strategist at Praevidential Strategy in Tokyo.
The euro was little changed at $1.1205, not far from a one-month trough of $1.1184 plumbed overnight.
US crude oil posted a modest rebound and was up 1.5 percent at $48.87 a barrel after plunging 5.5 percent overnight as rising US inventories countered expectations for recovering demand.
Reuters