Asia markets stumbled on the final trading day of the week, as a stronger dollar weighed on commodity prices, while Japan's benchmark government bond yield hit a record low ahead of next week's closely watched Bank of Japan meeting.
In Japan, the Nikkei 225 gave back 162.51 points, or 1%, to 16,668.41
In Hong Kong, the Hang Seng Index returned from holiday to drop 255.24 points, or 1.2%, to 21,042.64
Meanwhile, the 10-year Japanese government bond (JGB) yield fell to negative 0.147, after dropping as low as negative 0.15 earlier in the session. Bond yields move inversely to prices.
Many analysts expect that after the Bank of Japan's policy meeting ends next week on June 16, the central bank will likely announce further easing measures, which could include more purchases of JGBs. That could be spurring JGB buying from market players hoping to profit by reselling bonds to the central bank later.
Australian markets tumbled, led by declines in the financials, energy and materials sub-indexes as banks and resources producers came under pressure.
Analysts said the weakness was likely due to the hit that commodity prices took overnight as a result of the stronger dollar. Most commodity prices are denominated in dollars, while Australia's big banks have exposure to the resources sector.
The so-called Big Four banks in Australia - ANZ, Commonwealth Bank of Australia,Westpac and NAB - finished down as much as 1.3%
Energy stocks in the region closed lower, with Santos shares down 1.9%, Oil Search off 1.7% and Inpex off by 2.9%. Hong Kong-listed shares of CNOOC were off by 0.6%
Woodside Petroleum shares were off by 1.3%. Earlier this week, Credit Suisse downgraded Woodside Petroleum to underperform from a neutral rating, saying in a note the bank saw the majority of risks as still to the downside
Australian miners closed lower, with Rio Tinto down 3%, Fortescue off by 1.5% and BHP Billiton shedding 4.1%.
In other company news, shares of Virgin Australia jumped 3.6%, after reports said Air New Zealand had agreed to sell a 20% stake in the airline to China's Nanshan Group. Air New Zealand shares added 2.3%.
Markets in mainland China were closed for the Dragon Boat Festival
In other markets
In Korea, the Kospi docked 6.54 points, or 0.3%, to 2,017.63
In Singapore, the Straits Times Index moved lower 20.83 points, or 0.7%, to 2,822.97
In Taiwan, the Taiex index returned from a day off to gain 35.58 points, or 0.4%, to 8,715.48
In New Zealand, the NZX 50 nicked up 1.23 points to 6,971.78
The ASX 200 dropped 49.34 points, or 0.9%, to 5,312.60
