Asian shares turned mostly lower late Friday, as investors weighed the People's Bank of China's (PBOC) decision to set the midpoint rate for the yuan at 6.3975, slightly lower than the previous day's close of 6.3990.
The move broke the central bank's devaluation pattern since Tuesday, and in line with the PBOC's announcement on Thursday that there was no basis for continued currency depreciation.
A nearly flat finish on Wall Street overnight and a renewed decline in oil prices also kept a lid on risk appetite. Major U.S. indices pared gains and finished mostly lower on Thursday, as a fall in energy counters offset a rebound in July retail sales and easing concerns over the continued depreciation of the Chinese .
Mainland indices mixed
China's Shanghai Composite index narrowed gains to 0.3 percent end-Friday. Earlier in the session, the bourse rallied over 1 percent as authorities stopped guiding the currency lower.
Taking cues from the benchmark index, the blue chip CSI300 index pared gains to close near the flatline, while the Shenzhen Composite gained 0.5 percent.
Property heavyweights were among the gainers underpinning the rise in Shanghai; Poly Real Estate and Gemdale elevated 2.1 and 1.1 percent, respectively, while Vanke notched up 0.5 percent.
Despite the gains this week, Mikio Kumada, executive director and global strategist at LGT Capital Partners, told CNBC he is opting to sit out of the mainland markets for now.
"We think [the yuan devaluation] is part of China's policy adjustment amid a lower-growth environment and finding a balance between stimulating and over-stimulating its economy, because it still has problems such as credit mis-allocations. So for the time being, it's not a good time for China equities," Kumada told CNBC Asia's "Squawk Box."
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Meanwhile, Hong Kong's Hang Seng index ticked down 0.1 percent in rangebound trade.
Shares of Tianjin Port Development Holdings lost nearly 2 percent as the cargo handling and port ancillary services provider assessed losses caused by the explosion in Tianjin.
Nikkei slips 0.4%
Japan's dipped on the final trading day of the week, hurt by declines in commodity-related shares.
Oil counters came under selling pressure as oil prices crumbled under oversupply worries. JX Holdings and Inpex sagged nearly 2 percent each, while Showa Shell closed down 1.4 percent.
Mitsubishi Materials Corp and Sumitomo Metal Mining shaved off more than 1 percent each, while steelmakers such as JFE Holdings and Nisshin Steel lost 3.2 and 2.6 percent, respectively.
Attention also fell on the companies affected by the explosions in Tianjin, China. Mazda Motor receded 0.7 percent, but Toyota Motor and Fuji Heavy Industries, remained in positive turf, up 0.1 and 1.7 percent, respectively. Subaru-maker Fuji Heavy Industries suffered damage to more than 100 new vehicles in Tianjin, according to the Nikkei business daily.
ASX drops 0.6%
Australia's S&P ASX 200 index erased early gains to finish at a six-month trough.
In the resources sector, key energy and gold producers were sold off following weaker commodity prices. Santos and Woodside Petroleum fell 9 and 3.6 percent, respectively, while Newcrest Mining tanked 4.1 percent.
Financial heavyweights also slid deeper into the red; Westpac and Australia and New Zealand Banking plunged more than 1 percent each, while National Australia Bank closed down 0.7 percent.
Among firms which released their corporate earnings, James Hardie Industries pared gains to finish flat, despite delivering a 27 percent jump in first-quarter profit. Atlas Iron tacked on 3.3 percent, brushing off a staggering A$1.4 billion loss in its full-year results.
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KLCI skids 1.9%
Malaysia's benchmark FTSE Bursa Malaysia KLCI index was the biggest laggard in Asia on Friday, tumbling to its lowest level since February 2013. The ringgit also lost as much as 2.3 percent of its value against the greenback, touching fresh lows since the Asian Financial Crisis in 1998.
Meanwhile, markets in South Korea are closed for a public holiday.