China earlier this week reported its second straight quarter of slower growth and authorities appear determined to stick to a path of shifting the economy away from reliance on investment and exports, which could dent economic activity in the near term.
In Japan, the initial euphoria over the "Abenomics" stimulus policies of Prime Minister Shinzo Abe has faded and doubts have emerged about whether deeper reforms will be carried out. Japan holds upper house elections on the weekend.
"Although the U.S. market is at a record high, in Asia, people are still worried about two things: one, the slowdown in China, and then number two, the situation in Japan," said Francis Lun of GE Oriental Financial Group. He said there was concern "Abenomics may be running out of steam."
Lun said because the U.S. markets are doing well, a lot of fund managers have been shifting money from Asia to America."You have an exodus of funds that began in the second half of May and the exodus is still continuing," he said. Benchmark crude for August delivery was down 28 cents at $107.76 a barrel in electronic trading on the New York Mercantile Exchange. The contract jumped $1.56 to close at $108.04 on Thursday. In currencies, the euro rose to $1.3115 from $1.3106 late Thursday. The dollar fell to 100.25 yen from 100.48 yen.