Asia equities fall before US jobs but Shanghai bucks trend

Asian stocks outside of Shanghai declined on Friday following the European Central Bank's surprise rate cut overnight and amid caution ahead of a key U.S. jobs report.

European Central Bank (ECB) chief Mario Draghi caught markets off guard on Thursday by cutting interest rates to a record low of 0.05 percent and the overnight rate to negative 0.2 percent, further penalizing banks for parking money at the central bank. The ECB also said it would launch a program next month to buy asset-backed securities.

Read MoreECB action – next catalyst for emerging markets?

Attention now turns to the U.S. August nonfarm payrolls report due later on Friday. Analysts polled by Reuters expect a figure of around 225,000 nonfarm payrolls following July's gain of 209,000 jobs. The unemployment rate is seen dropping to 6.1 percent from 6.2 percent.

Investors are also watching peace talks between Ukraine's president and pro-Russian rebels on Friday. The separatists have said they are willing to sign a truce agreement if a political solution can be found for their region.

ASX 200
CNBC 100

Shanghai gains 0.8%

China's benchmark Shanghai Composite finished at its highest level since March 2013, gaining for the sixth consecutive session thanks to a rally amid port operators.

Read MoreIs the yuan's recovery still intact?

Shanghai International Port and Ningbo Port rallied by the maximum limit of 10 percent after the government unveiled plans this week to support the shipping industry.

Trainmakers China CNR and CSR Corp rallied over 2 percent each after denying reports that the government was looking to merge the two firms. Trading in both shares was halted for the previous two sessions.

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Nikkei flat

Japanese shares reversed gains in the afternoon session, declining for a second day after rallying to seven-month highs this week. Earlier in the day, investors had cheered a weaker yen as it dropped to a six-year low against the greenback, boosting currency-sensitive exporters.

Sony shed 2 percent, extending losses after unveiling two new wearable devices on Wednesday.

Read MoreJapan loosens China's grip on rare earths

Homebuilder Sekisui House rallied 2 percent after reporting strong earnings for the February-July period.

ASX dips 0.6%

Australia's benchmark S&P ASX 200 ended at its lowest levels in nearly three weeks, declining for a third straight session.

Miners were sold off as iron ore prices continued to trade at five-year lows; Fortescue Metals tumbled over 3 percent while Rio Tinto and BHP Billiton lost more than 1 percent each.

Agribusiness firm Elders slid nearly 7 percent after announcing the sale of its 50 percent interest in logistics firm AWH to DP World Australia for $30 million.

Kospi falls 0.3%

South Korea's benchmark Kospi index reversed early gains to close at a two-week low, weighed down by a near 2 percent fall in Hyundai Motor.

Nifty finishes flat

Indian shares finished flat on Friday after initially retreating further from Wednesday's record high.