Asian shares dipped and the safe-yen haven yen edged up on Friday in a muted reaction to U.S. bank stress results that provided no real surprises, with investors turning cautious ahead of U.S. employment data later in the day.
Also weighing on sentiment was a weak auction of 30-year U.S. Treasury bonds on Thursday, which raised worries about how much the world's top economy will have to pay to finance its massive stimulus plans.
The U.S. 30-year bond remained under pressure during Asia trading, with yields rising to 4.30 percent, up 1 basis point from late U.S. trading. On the other hand, the benchmark 10-year note gained ground, with yields down about 2 basis points to 3.32 pecent.
"The announcement of stress test results came with the best timing after market sentiment had already been improved by a slew of upbeat economic data along with a recovery of stock markets," said Yoshihisa Kanzaki, a trader at Shinkin Central Bank.
U.S. regulators told top banks on Thursday to raise $74.6 billion to build a capital cushion officials hope will restore faith in financial firms and set a course out of the deepest recession in decades.
U.S. stocks fell earlier in the day, before news of the tests was released, as investors took profits on the recent global share surge. But removal of uncertainty over the test results helped send U.S. stock futures higher in after-hours trade, with the S&P 500 futures index up 0.7 percent.
The gains failed to translate in Asia, however, where the MSCI index of Asian stocks outside Japan fell 0.5 percent. The index had chalked up an 8.6 percent gain over the previous four sessions.
Among major indexes, only Japan's Nikkei average and South Korea's KOSPI advanced but only modestly. Other countries posted moderate losses.
Despite some signs that global economic downturn may be bottoming out, a major test will come later on Friday with the release of U.S. employment data for April.
Economists forecast a median 590,000 U.S. jobs were lost, which is down from March, but they also expect the unemployment rate to have gained to 8.9 percent from 8.5 percent in the previous month.
The safe-haven yen faltered, with the dollar edging up 0.2 percent to 99.38 yen near a three-week high of 99.80 yen hit the previous day on EBS.
The euro edged down 0.2 percent to $1.3367 as traders reduced long positions made the previous day after the European Central Bank's announcement it would buy about 60 billion euros worth of covered bank bonds was seen as underwhelming in light of much bigger similar measures taken in other countries.
