Most Asia markets gained on Friday, retracing earlier losses, despite a fresh stream of hawkish commentary from U.S. Federal Reserve officials.
Japan's benchmark Nikkei 225 index ended up 0.54 percent, or 89.69 points, at 16,736.35, erasing earlier losses, and the yen strengthened a bit against the U.S. dollar, possibly in a risk-off shift toward the safe-haven currency. The dollar-yen pair was at 110.20 at 2:23 p.m. SIN/HK, after spending much of the session hovering around 110, compared with levels as high as 110.34 Thursday.
Hong Kong's Hang Seng Index added 1.06 percent by 3:19 p.m. SIN/HK after dropping for the past two sessions. On the mainland, the Shanghai Composite ended up 0.68 percent, or 19.03 points, at 2825.94, and the Shenzhen Composite gained 1.07 percent, or 19.067 points, to finish at 1794.95.
Australia's S&P/ASX 200 index ended up 0.53 percent, or 27.958 points, at 5351.30 as the energy and materials sub-indexes rose 0.71-0.93 percent, retracing some recent losses. South Korea's Kospi inched up 0.05 percent, or 0.89 point, to 1947.67 after wavering between positive and negative territory.
The muted reaction to the possibility of tighter U.S. monetary policy comes as markets aren't pricing in much chance of a potential Fed hike, with analysts saying market indicators suggested a roughly 30 percent likelihood of a June step higher.
That may be because some market players are taking the Fed's signals with grains of salt.
"People are already starting to wonder how much truth there is to a summer rate hike, or if it is one of the Fed's countless charades," said Mark Matthews, head of research for Asia at private bank Julius Baer, in a note Friday. "They don't want people to think there will never be a rate hike, so they have to have the threat of one out there."
But he noted that the Fed doesn't want the U.S. dollar to appreciate — a likely outcome of a rate hike. He added that the Fed is also known to call off plans to hike rates if there are sudden market moves in stocks, the dollar and emerging markets.