Asia markets closed lower on Thursday, as a weaker dollar weighed on Japan's shares and South Korean stocks failed to get a boost from a surprise interest rate cut.
In Japan, the Nikkei 225 gave back 162.51 points, or 1%, to 16,668.41
The yen traded at 106.52 against the U.S. dollar, dropping from levels near 107.80 earlier in the week.
Markets in Hong Kong, mainland China and Taiwan were closed for the Dragon Boat Festival
Japanese exporters closed mostly down, with Toyota off by 1.4% Nissan down 2.5% and Sony off by 1.4% A stronger yen is a negative for exporters as it reduces their overseas revenue when converted into local currency.
Earlier in the session, data released by the Cabinet office in Japan showed business investment in the country was contracting, which also weighed on the stock market. Japan's core machinery orders for April, excluding orders from ships and electric power companies, decreased a seasonally adjusted 11% from the previous month. Economists had estimated a 3.8% decline.
Major Australian miners finished up, with shares of Rio Tinto higher by 0.6%, Fortescue up 3.5% and BHP Billiton gaining 0.4%
Energy plays in the region advanced, with Santos shares up 1.5%, Oil Search up 0.3%, and Inpex adding 2.6%.
The Bank of Korea (BOK) surprised markets by cutting its policy rate by 25 basis points to a record-low of 1.25%. A poll of analysts showed markets expected the central bank to keep rates steady at 1.5%
South Korean stocks had a muted reaction to the decision.
The Korean won weakened against the U.S. dollar, with the pair trading as high as 1160.30 after the decision, compared with as low as 1150.47 before the announcement. Near the close, the dollar/won pair reversed gains to trade at 1153.03.
Analysts said the soft outlook for South Korea's growth prospects influenced the BOK's decision to move on Thursday.
On Wednesday, Reuters reported the South Korean finance minister said the government and the BOK will create an 11-trillion-won ($9.50 billion U.S.) fund to support the two state-run banks most exposed to the shipping and shipbuilding firms currently being restructured.
Early Thursday, the Reserve Bank of New Zealand (RBNZ) announced that it kept its official cash rate unchanged at 2.25% at its policy meeting. The New Zealand dollar was trading at $0.7127 U.S. near the close, compared with around $0.7003 U.S. before the decision
In other markets
In Korea, the Kospi docked 2.91 points, or 0.1%, to 2,024.17
In Singapore, the Straits Times Index moved lower 18.58 points, or 0.7%, to 2,843.80
In New Zealand, the NZX 50 dipped 20.96 points, or 0.3%, to 6,970.55
The ASX 200 shed 8.04 points, or 0.2%, to 5,361.94
