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A day earlier Asian and European stock markets and oil fell sharply and the dollar rose to a nine month high, after the prospect of the Federal Reserve cutting back bond purchases spooked investors.

This also sent the dollar to its highest level since early November, gains which it held onto on Friday.

The dollar index, which measures the currency against six rivals, was little changed from the previous day at 93.517 on Friday.

"The recent weakness in Asian equity markets is partly driven by the strengthening of the U.S. dollar as the market prepares for the gradual reduction of monetary stimulus," said Fan Cheuk Wan, HSBC's Asia chief investment officer for private banking.

The strong dollar will keep Asian equity markets volatile so we need to wait for clarity from Jackson Hole," she added.

The US Federal Reserve will hold its annual research conference in Jackson Hole, Wyoming, next week. Fed Chair Jerome Powell is due to give a speech that will be scoured for clues on the central bank's next steps.

On Friday, traders are also waiting to assess Chinese policy makers' thinking, as the country will set its benchmark lending rate.

A Reuters survey showed China is expected to keep the rate unchanged for the 16th straight month, but some traders and analysts believe a cut may be needed soon amid signs the country’s economic recovery is losing steam, a Reuters survey showed.

China Evergrande Group bucked the declines in China and rose 1.8 per cent even after China's central bank said it had summoned the indebted property developer's executives to talks and warned that the company needs to reduce its debt risks.

On Wall Street, stocks ended the day mixed, with defensive and tech-heavy stocks regaining ground after two days of losses. The Dow Jones Industrial Average fell 0.19 per cent, while the S&P 500 climbed 0.13 per cent and the Nasdaq Composite added 0.11 per cent.

Oil prices continued to fall. US crude dipped 2.57 per cent to $63.78 a barrel. Brent crude was flat at $66.42.

US Treasury yields were fairly quiet in Asian hours. The yield on benchmark 10-year Treasury notes was last 1.24367 per cent compared with its US close of 1.242 per cent on Thursday.

Gold too stabilised after declines on Thursday; the spot price was $1783.0649 per ounce, up 0.16 per cent.

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