Japan shares whipsawed and the yen surged after the Bank of Japan threw markets a smaller-than-expected bone in a keenly watched decision on Friday.
The Nikkei 225 recovered 92.43 points, or 0.6%, to 16,569.27, having lost as much as 1.6% before recovering.
In Hong Kong, the Hang Seng Index tumbled 282.97 points, or 1.3%, to 21,891.37
While the BOJ eased its monetary policy further by increasing its purchases of exchange-traded funds (ETFs), it didn't change interest rates or increase the monetary base, as analysts had widely expected.
The central bank said it would increase its ETF purchases so that their amount outstanding on its balance sheet would rise at an annual pace of six trillion yen ($56.7 billion U.S.), from 3.3 trillion yen previously.
The Japanese yen surged against the U.S. dollar after the announcement, with the dollar-yen pair falling as low as 102.85, compared with around 103.75 immediately before the decision. The pair was already volatile before the announcement, touching a session high of 105.33.
Late Friday afternoon, the greenback was fetching 103.52 yen.
On the fiscal front, Japanese media agency Jiji reported earlier this week that Prime Minister Shinzo Abe was preparing a stimulus package worth 28 trillion yen ($265.30 billion U.S.), which exceeded the top-end of initial estimates of around 20 trillion yen.
That made the BOJ's relatively tame moves even more surprising as analysts had said the fiscal stimulus details may have been leaked to pressure the central bank
Data from Japan's Bureau of Statistics released before market open showed that nationwide, the consumer price index (CPI) fell 0.4% on-year, while the core CPI, which excludes fresh food items, dropped 0.5% on-year. The so-called core CPI, which excludes food and energy items, gained 0.4% on-year.
Shares of Nomura closed up 12.5%, amid reports the bank was planning a 45-billion-yen buyback of up to 2.6% of its shares. In its earnings numbers, Nomura said its April-June net profit dropped to 46.83 billion yen, from 68.7 billion yen a year earlier.
On the earnings front, Japanese electronics maker Sony released earnings for the three months ended June 30, after market close. Operating profit dropped 42% to 56.2 billion yen ($542.7 million U.S.) on-year. Sony said the drop was due to deterioration in the semiconductors segment, which was partially offset by the mobile communications and games & network services businesses.
Sony added it booked a net charge of 13.6 billion yen in expenses in the semiconductors business, resulting from the 2016 Kumamoto Earthquakes.
Sony shares closed up 2.8%.
Shares of Singapore's DBS Group fell 2.9% following reports that the bank expected to recover about 50% of its $519-million U.S. exposure to the collapse of a big Singapore oilfield services firm, Swiber.
In South Korea, industrial output in June fell 0.2% on a seasonally adjusted basis on-month, compared with a poll that expected an uptick of 0.2%. Media reports revealed that on an annual basis, industrial output rose 0.8% in June, after a revised 4.7% gain in May.
In other markets
The Shanghai CSI 300 descended 17.21 points, or 0.5%, to 3,203.93
The Taiex Index in Taiwan lost 92.23 points, or 1%, to 8,984.41
In Singapore, the Straits Times Index shed 49.93 points, or 1.7%, to 2,868.69
In Korea, the Kospi deleted 4.91 points, or 0.2%, to 2,016.19
In New Zealand, the NZX 50 gained 41.78 points, or 0.6%, to 7,348.13
The ASX 200 added 5.8 points, or 0.1%, to 5,562.36
