Asian stocks reversed earlier losses on Friday led by a 2 percent rally in Shanghai as investors cheered news that the yuan's trading band may be widened, which offset bearish sentiment triggered by weak U.S economic data.
The Shanghai market was Asia's best performer for the week, notching up gains of 1.7 percent while Australia's benchmark was the worst, losing 1.6 percent.
Reports revealing declining factory activity in the U.S contributed to initial losses in Asia, as well as a gauge of future economic activity by the Conference Board that dipped in March for the first time in seven months.
However, comments from China's central bank suggesting a widening of the yuan's trading band fueled the mainland's rally and cut Asian losses.
(Read More: Is a Change in China's Currency Policy Imminent?)