Asia Markets

Nikkei leads losses in Asia after hawkish Fed remarks

Asian equity markets declined on Friday following hawkish comments from a Federal Reserve official.

Speaking in a televised interview in the U.S. overnight, St. Louis Fed President James Bullard suggested interest rates could rise sooner rather than later, leading Wall Street shares to end in the red overnight.

"Given Janet Yellen's last comments highlighted 'noise' in the inflation reading, these comments [from Bullard] have some significance. In fact, most of the Fed comments this week have been quite hawkish and perhaps this resulted in the subdued performance in equities," said Stan Shamu, market strategist at IG in a note.

Also weighing on sentiment was data showing that U.S. consumer spending rose less than expected in May, which led many economists to pare back growth forecasts for the second quarter.

Nikkei slips 1.4%

Japanese shares fell to a more than one-week low despite data showing that May core consumer prices rose at their fastest pace since 1982. A stronger yen was to blame for the weaker sentiment as the currency hit its highest levels in over a month at 101.3 per dollar.

Japan ruling party: Investors must be patient
Japan ruling party: Investors must be patient

Declines in index heavyweights were to blame; Fast Retailing skidded nearly 3 percent while Canon and Fanuc lost 2 percent each.

Engineering companies bucked the trend after Toyota Motor said earlier this week that it will begin selling hydrogen fuel cell electric vehicles this fiscal year. Hydrogen station maker Mitsubishi Kakoki Kaisha rallied 21 percent.

Shanghai flat

Mainland shares traded in a narrow range throughout the session after investigators discovered $15 billion in gold-backed loans on Thursday that could be fraudulent. The findings come after authorities suspected improper loans backed by metals at the ports of Qingdao and Penglai.

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Steel firms led the gains on the Shanghai Composite, with Baotou Steel rallying over 3 percent and Baoshan Steel up over 2 percent.

Hong Kong-listed Standard Chartered dropped nearly 4 percent after warning that profits would fall for the second straight year this year.

Why SocGen likes Chinese shares
Why SocGen likes Chinese shares

ASX 0.3% lower

Australia's benchmark index erased gains after climbing to its highest level in over two weeks at 5,480 points after the Reserve Bank of Australia's assistant governor said there were no signs of a speculative credit bubble in domestic house prices.

Read MoreWhy Australia shares may be poised to rally

Miners ended mixed after iron ore prices rose to above $95 a ton, recovering from last week's 21-month low. Fortescue Metals rose 1.8 percent while Mount Gibson slumped 4 percent.

Kospi down 0.3%

South Korean shares retreated after ending at its highest levels in over a week on Thursday, but still managed to rally 1 percent for the week. Data showing May industrial output came in well below expectations darkened the mood.

Blue-chip stocks led the losses with index heavyweight Samsung Electronics down 1 percent.

Meanwhile, the rallied to a near six-year high against the dollar at 1,013.

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Sensex up 0.2%

Indian shares managed to avoid Asia-wide losses after the central bank said on Thursday that prospects for the country's economic recovery look bright following the formation of a stable government.