TOKYO Weak euro zone growth data dampened sentiment in markets from Asian shares to copper to gold, while the yen was jittery as investors awaited news from the G20's Moscow meeting.
The MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was trading in a wafer-thin range, rising 0.1 percent after falling 0.1 percent earlier in the session.
The index was set for a weekly gain of 1.3 percent, however, for its best such performance since the week to January 6, when it was underpinned by an improving global growth outlook for this year and receding risks from the euro zone debt crisis.
Stocks in the Philippines and Indonesia hovered near records hit the day before.
Australian and South Korea shares consolidated from recent strong rise. Australian shares steadied after touching a 4-1/2 year high on Thursday, compounded by the weak euro zone data and a $3 billion annual loss from global miner Rio Tinto Ltd (RIO.AX). South Korean shares steadied after closing on Thursday at a fresh three-week high as the yen firmed.
The Nikkei stock average fell 0.9 percent.
Markets in China and Taiwan remained shut for the Lunar New Year holiday.
Investors kept an eye out for potential fallout from the sliding yen at the G20 meeting on Friday and Saturday in Moscow.
The yen traded in narrow ranges against other major currencies as investors cut back yen short positions as speculation grew that Japan might be singled out because of the yen's steady drop over the past three months.
"Investors are sitting on the fence after KOSPI's recent rebound and ahead of the G20 meeting. The meeting would pave the way to put a brake on the sharp fall of the yen for the past two months," said Cho Young-hyun, an analyst at Hana Daetoo Securities.
The yen steadied after gaining on Thursday for the third straight day, adding 1.5 percent for its best three-day advance in three weeks.
Many traders and analysts say currencies will be discussed, but yen weakness is unlikely to top the agenda so long as Japan convinces delegates it is pursuing strong monetary easing to reflate the economy, and yen devaluation is a side-effect.
"The prevailing sense from all of the official commentary on currencies this week is that the international community is willing to tolerate a weaker yen so long as Japan continues to focus on domestic policies and probably moderates its rhetoric on the currency," JPMorgan said in a note.
The dollar was nearly flat at 92.82 yen. It marked its highest since May 2010 of 94.465 on Monday. The euro was also steady around 124.00 yen, after scaling its peak since April 2010 of 127.71 yen last week.
CHINA ABSENCE WEIGHS
Copper and gold prices were capped by the weak European data which raised concerns about demand, and the absence of Chinese investors away on holiday.
London copper was flat but set to log its largest weekly loss this year.
Spot gold fell to a six-week low below $1,630 an ounce.
The euro steadied around $1.3362 after falling to a three-week low of $1.3315 on Thursday as a report showed the 17-nation euro zone economy shrank by 0.6 percent in the last three months of 2012. The bloc's two largest economies, Germany and France, also contracted by more than expected, damping down hopes for a recovery in early 2013.
The bleak growth outlook weighed on the euro by raising expectations the European Central Bank will cut interest rates.
European shares fell on Thursday, but U.S. stocks ended nearly flat as favourable U.S. weekly jobless data and a $23.2 billion cash bid by Warren Buffett's Berkshire Hathaway (BRKa.N) and private equity firm 3G Capital for food manufacturer H.J. Heinz HNZ.N offset falls.
Yields on U.S. Treasuries slid from 10-month highs on Thursday as investors shifted their money to assets seen as safe havens, pushing up bond prices.
With Japanese stocks rising on the yen's weakness, Japanese mutual funds saw the biggest monthly net inflow in 21 months in January as retail investors poured into money reserve funds after locking in profits from rising domestic stocks and equity funds, the Investment Trusts Association said on Thursday.
U.S. crude inched up 0.1 percent to $97.43 a barrel and Brent steadied around $117.98.
(Additional reporting by Ian Chua in Sydney and Hyunjoo Jin in Seoul; Editing by Eric Meijer)