Tokyo/Hong Kong: The yen regained some of the losses it suffered last Friday with no confirmation of rumours Japan was intervening for the second time this month.
The intervention talk had helped Japanese equities cut their losses on strength in exporter stocks, but the benchmark index drifted lower later in the day.
European shares opened lower after latest US jobless claims figures added to persistent concerns that the global economic recovery was still fragile.
Britain's FTSE 100 was down 0.3 per cent, Germany's DAX fell 0.2 per cent, and France's CAC-40 eased as much as 0.4 per cent.
Five-month peak
The MSCI index for Asia ex-Japan stocks was flat following the US jobless data, although the benchmark is up one per cent on the week. It is just off a five month peak struck earlier last week.
Initial US claims for state unemployment benefits increased 12,000 to 465,000 last week, the Labour Department said on Thursday, breaking two straight weeks of declines. Financial markets had forecast claims steady at 450,000.
Japan's Nikkei share average finished down one per cent after initially climbing on the yen intervention talk.
Rising diplomatic tensions between Japan and China also weighed on sentiment.
"The Nikkei was only briefly helped by the talk of intervention, especially since it's hard to tell if any such move actually took place," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.
Risk factors
"There's a lot of risk factors that have suddenly emerged, such as the situation with China, and this is making it very hard for the Nikkei to rise."
The dollar rose as high as 85.40 yen (Dh3.70) from about 84.55 yen in a matter of minutes, and several traders said it looked like the Bank of Japan, which acts on behalf of the Ministry of Finance, had been selling yen.
The currency drifted back towards 84.70 yen on the lack of confirmation on government intervention.
