Japan's benchmark index tumbled to its lowest level in nearly three weeks on Friday as the yen rose against the greenback while the rest of Asia traded mixed as attention turned to the region's corporate earnings results.
The Nikkei dropped over 400 points and the Shanghai Composite lost half a percent in range-bound trade. Amid gainers, South Korea's Kospi index ended flat and Australian stocks pared gains after hitting a new two-month high.
For the week, the Kospi was Asia's best-performing index with gains of over 2 percent while the Nikkei took last place with a 3 percent loss.
Nikkei skids 3%
A strong currency weighed on Japan's benchmark index, offsetting gains from positive economic data, leading the index to its lowest levels since July 9.
The yen hit a new two-week high at 98.6 against the greenback, leading to a steep sell-off in various sectors. Banks declined with Mitsubishi UFJ down 4.7 percent while Sumitomo Mitsui Financial lost 3.9 percent. Automakers Toyota Motor and Mitsubishi Motor fell nearly 4 percent each.
In earnings news, Advantest tanked 10 percent after the chip maker reported an operating loss of $33 million for the April-June quarter. Steelmaker JFE Holdings fell 8 percent after providing disappointing profit guidance.
Core consumer prices rose 0.4 percent in June from a year earlier, logging its fastest pace of growth in five years, Reuters reported.The results suggest the Bank of Japan's (BOJ) aggressive monetary stimulus policies are helping lift inflation and puts it on track to meet a 2 percent inflation target.
"Investors generally struggle to interpret Japanese data as solid readings generally support the currency, but in this case a stronger yen is a negative. Overall this proves that Abenomics is working, but then implies the BOJ won't need to increase the current rate of stimulus which is a bit of a dampener to a stimulus driven market," wrote Stan Shamu, market strategist in a note.
Shanghai slips 0.5%
China's benchmark index traded in a narrow 20-point range as investors shrugged off the government's latest measures to boost a slowing economy.
The People's Bank of China governor Zhou Xiaochuan said that the central bank will continue to operate a prudent monetary policy and help improve financing conditions for small firms. Despite the comments, money market rates continued to rise and that added pressure on financials.
Founder Securities, Haitong Securities and Agricultural Bank of China fell 1 percent each after the seven-day repurchase rate spiked to around 4 percent.
"There has been plenty of talk around China's credit recently as the rapid build-up in credit threatens to be a bubble following the changes in policies by the new government. Analysts feel the diminishing effect of credit growth on China's growth is a reason for concern," added Shamu.
(Read more: Is a big China currency move in the works?)
Material stocks rallied after the Ministry of Industry and Information technology ordered companies to close outdated capacity. China's largest cement producer Anhui Conch Cement was higher by 3 percent.
Sydney up 0.1%
Australia's benchmark index pared gain after briefly rising above 5,060 points to hit a new two-month high thanks to a rally in banking stocks. Westpac led gains by 1.5 percent while Australia and New Zealand Banking rose 1 percent.
Miners were unable to track gains in iron ore prices on fears of softer growth in China. Mount Gibson closed down 3.4 percent and Atlas Iron fell 2.3 percent.
(Watch now: Australia corporate earnings to pick up: Pro)
The index posted gains of 1.4 percent for the week.
The yen's strength boosted South Korean exporter stocks and helped the index trade within 6 points of a new six-week high.
But modest losses in blue-chip stocks capped gains. Samsung Electronics lost 0.9 percent after reporting April-June operating profit rose 47.5 percent from a year before, but warned the smartphone market is slowing down.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter