Asian shares edged lower ahead of U.S. monthly employment data due on Friday that will provide another step in determining whether the recent signs of an improving global economy are real or just wishful thinking.
Also weighing on sentiment was a weak auction of 30-year U.S. Treasury bonds on Thursday that raised worries about how much the world's top economy will have to pay to attract investors such as China in order to finance its massive stimulus plans.
U.S. stocks had fallen on Thursday ahead of formal results for stress tests for major U.S. lenders. The outcome came after Wall Street's close and provided no real surprises.
However, the removal of the uncertainty boosted U.S. stock futures, while the dollar gained broadly.
The market is already starting to search for new trading factors, basically looking to macro indictors for confirmation that the global economy is truly on a rising trend, said Masayoshi Okamoto, head of dealing at Jujiya Securities in Japan.
The concerns over U.S. lenders that for months had dented global stock markets have slowly dissipated over recent weeks following U.S. regulator reassurances that the sector was holding up better than expected and hopeful signs on the global economy.
U.S. regulators concluded that major U.S. banks need to raise $74.6 billion to build capital cushions, a smaller amount than what investors had once feared.
Instead investors have focused on signs that the global economy may have already seen the worst of times, with a drop in new U.S. jobless claims and better German manufacturing data on Thursday adding to that optimism.
The European Central Bank also joined other policy makers in cutting interest rates on Thursday, an action that had been widely expected, while adding it will buy up bonds for the first time, albeit in more limited fashion than other central banks.
The U.S. April employment data due out at 1230 GMT could be key in helping set a near-term course for global markets, with economists forecasting the pace of lay-offs has eased.
Economists polled by Reuters forecast 590,000 U.S. jobs were lost, which would be down from March, but they also expect the unemployment rate to have gained to 8.9 percent from 8.5 percent in the previous month.
Given the huge amount of cash standing on the sidelines, a positive surprise on the job report could extend the rally, Calyon said in a report referring to stock markets.
The MSCI index of Asian stocks outside Japan <.MIAPJ0000PUS> fell 0.2 percent as of 0420 GMT, after the index had chalked up an 8.6 percent gain over the previous four sessions.
That gauge is still up about 50 percent since it reached its year low in early March.
Fund flows into Asia have seen an upswing. The EPFR Global-tracked Asia ex-Japan Equity Funds posted the biggest inflows among the four major emerging markets equity fund groups for the second week running, taking in $1.62 billion.
Equity funds geared to China, Taiwan and Greater China accounted for two thirds of this week's flows into Asia ex-Japan Equity Funds.
But on Friday major Asian indexes gave some ground, although Japan's Nikkei average <.N225> managed to eke out a 0.2 percent gain, after earlier hitting a six-month high.
Other major indexes around the region, including Australia's <.AXJO> and Taiwan's <.TWII>, posted modest losses.
Shares of China Zhongwang Holdings <1333.HK>, Asia's largest maker of aluminum extrusion products, fell about 2 percent in their Hong Kong trading debut after the company raised $1.3 billion in the world's biggest IPO since August.
Corporate earnings reports were also a major focus for investors in the region. Shares in Toyota Motor Corp <7203.T> fell 3 percent after the Nikkei business daily reported the Japanese auto maker would likely forecast an operating loss of $7.1 billion this financial year.
More broadly, the improving mood in global markets will need confidence that governments worldwide have the ability to finance the trillions being spent in spending plans or alternative measures such as buying corporate or government debt.
In that regard, the weak demand for a new sale of U.S. 30-year Treasury bonds was a concern.
The 30-year bond remained under pressure during Asia trading, with yields rising to 4.30 percent, up 1 basis point from late U.S. trading. On the other hand, the benchmark 10-year note gained ground, with yields down about 2 basis points to 3.32 percent.
The dollar index, a gauge for the greenback's performance against six major currencies, rose 0.1 percent to 83.980 <.DXY>, recovering from a six-week low of 83.424 touched on Thursday.
The euro edged down 0.2 percent to $1.3363 as traders reduced long positions made the previous day after the European Central Bank's announcement it would buy about 60 billion euros worth of covered bank bonds was seen as underwhelming in light of much bigger similar measures taken in other countries.
In energy markets, U.S. crude futures rose 60 cents to $57.30 a barrel, and headed for weekly gains of more than 7 percent on signs that the global economy may have reached a bottom.