Earnings disappointments drove Asian stocks lower on Friday, helping to snap the region's longest streak of weekly gains in 18 months, while gold shot to a three-week high above $910 an ounce after China revealed it now has the world's fifth-largest stock pile.
The move away from equities helped Japan's yen, which gained broadly, rising to a four-week high against the dollar.
Japan's Nikkei average fell 1.6 percent, underperforming the broad regional downdraft, which saw the MSCI index of Asia Pacific shares outside Japan fall 0.4 percent on the day. Hong Kong's Hang Seng index fell 0.6 percent.
The pan-Asian index slid 0.9 percent for the week, with edginess about the financial sector ahead of earnings and the U.S. government's bank stress tests helping fuel risk aversion.
The drop brought to an end its longest weekly winning streak since an eight-week run that ended in October 2007. The index had gained more than 30 percent in the latest six-week run.
In Japan, mobile phone operator KDDI sank on disappointing earnings, while steelmaker JFE Holdings lost ground after not issuing an annual earnings forecast.
Auto makers were also on the defensive on news that U.S. automaker Chrysler was readying a bankruptcy plan with one week to go before its government-imposed deadline to forge a deal with Italy's Fiat.
If Chrysler were to really go bankrupt, that would increase fears about a GM bankruptcy, said Fumiyuki Nakanishi, manager at SMBC Friend Securities. The economic outlook in the United States is also still poor, as can be seen with dismal existing homes sales data.
European shares, however, looked set to buck the trend and track overnight gains on Wall Street. Futures on major European indexes suggested rises of nearly 1 percent when they open.
Spot gold shot to as high as $911.80 an ounce after Xinhua news agency quoted Hu Xiaolian, head of the State Administration of Foreign Exchange (SAFE), as saying the country's reserves had risen by 454 tons since 2003 and were now the fifth biggest in the world. Only six countries holding more than 1,000 tons.
They are increasing their gold holdings because they are worried about the dollar, Peter McGuire, managing director at Commodity Warrants Australia, said. I know if I held $2 trillion in U.S. treasuries I'd want to hedge it.
The dollar was weaker, particularly against the yen. The dollar fell more than 1 percent against the Japanese currency, last trading at 96.95, down from 98.05 late in New York. It was the first since March 30 it has dropped below 97 after topping the 101 level a little over two weeks ago.
Among those negative factors, risk aversion is increasing and the yen is the beneficiary, said Toru Umemoto, chief FX strategist Japan at Barclays Capital.
Commodities such oil edged lower after reports overnight reflected no change in deteriorating U.S. housing and labor market conditions.
Near-term the key event for many investors is the public release on May 4 of a series of tests designed to see how 19 U.S. banks, including Bank of America, Citigroup and JPMorgan, would fare under more adverse economic conditions.
U.S. officials were expected on Friday to release the methodologies used in the tests.
The situation is precarious since results that are too positive would increase skepticism among investors, while really negative results could renew indiscriminate selling of financials and exacerbate market volatility.
U.S. crude prices slipped 0.9 percent, or 45 cents, to $49.17 a barrel after a late rally on Wall Street overnight led oil to close higher.
(Additional reporting by Kevin Plumberg in Hong Kong and Elaine Lies in TOKYO)