Asian shares dip but on track for weekly gain

Asian shares took their cue from Wall Street and slipped on Friday, but were still on track for gains in a week marked by a depreciating yuan in China and the first US interest rate hike in nearly a decade.

By contrast, Taiwan's central bank cut interest rates for the second time this year and said it would keep monetary policy loose to shore up growth in the island's trade-dependent economy as the global demand outlook worsened.

"The global macro dynamics from the beginning of a Fed rate hiking cycle are slowly playing out across the world. In the direct wake of the decision we have seen some dramatic moves in central bank policy with Taiwan cutting its benchmark interest rate, Hong Kong and Mexico both hiking rates, and Argentina removing currency controls and devaluing the peso by 30 percent," Angus Nicholson, market analyst at IG in Melbourne, said in a note to clients.

China's yuan has weakened against the dollar for 10 straight sessions through Thursday, the longest weakening streak on record, after the central bank guided the Chinese currency lower.

Wall Street drooped on Thursday as crude oil futures continued to wallow at multi-year lows against a backdrop of oversupply as well as a stronger dollar following the US Federal Reserve's widely anticipated tightening on Wednesday.

US crude futures CLc1 continued to slip in Asian trading, down 0.6 percent at USD 34.74 a barrel. Brent LCOc1 ended trade on Thursday less than USD 1 above its 2004 low of USD 36.40.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.4 percent in early trade, but still on track to log a 1.5 percent rise for the week.

Japan's Nikkei edged down about 0.1 percent, poised for a weekly gain of 0.5 percent, as investors awaited the conclusion of the Bank of Japan's two-day meeting expected later in the session.

BOJ policymakers are widely seen holding off on expanding the bank's massive stimulus programme.

Ahead of the policy review, the dollar was flat against the Japanese currency at 122.54 yen, and up over 1 percent for the week.

The euro was up about 0.1 percent USD 1.0834, but down more than 1 percent for the week.

The dollar index .DXY, which tracks the greenback against a basket of six rivals, edged down about 0.2 percent to 99.033, but was still up about 1.5 percent for the week.