Asian shares were broadly weaker Friday, as a strong dollar rolled through Asian markets.
Australia's S&P/ASX 200 was down 0.3%, while the Korea Kospi fell by 0.4%, and Singapore's Straits Times Index was also off 0.7%.
Japan's Nikkei Stock Average was an outlier, up slightly. A cheaper yen makes Japan's exports more competitive.
Among key export stocks, Nissan Motor gained 1%, while Honda Motor rose 0.7%.
Meanwhile, the yuan hit a record low against the U.S. dollar in offshore trading Friday. The euro briefly touched its lowest level since March 10 against the dollar after European Central Bank chief Mario Draghi suggested the central bank may extend its program of bond purchases beyond its scheduled expiration in March.
"It is the pace of change in the dollar market that is a cause of concern," said Chris Weston, the chief market strategist at IG. A stronger dollar hurts returns that U.S. investors earn on overseas investments. The greenback is expected to keep gaining strength till December, said analysts. "A Fed hike in December is more of a mainstream view now," added Mr. Weston.
The odds of an increase in interest rates in the U.S. by December rose to 73.6% on Friday from 69.5% a day earlier, CME Group data showed, sending the dollar broadly higher against Asian currencies.
The WSJ Dollar Index, which tracks the currency against 16 other currencies, was up 0.2% at 88.51 in morning Asian trade. The dollar gained 0.2% against the Japanese yen and by 0.4% each against the Philippine peso and 0.4% against the Korean won.
Chinese stocks fell, as traders balanced yuan declines with strong China housing price data released Friday.
The yuan's record low stoked fears of a renewed cash exodus from China, as was seen after Beijing sharply depreciated the currency in August 2015. China's housing market continues to sizzle, however, with home prices rising (on month) in 63 of 70 cities in September, versus 64 in August. Average new home prices rose 1.8% (on month) in September, versus a 1.3% gain in August.
"Investors are on the fence as to whether to divert funds from properties to equities," said Zhang Xin, an analyst at Guotai Junan Securities.
The benchmark Shanghai Stock Exchange Composite was last down 0.4%.
The stronger dollar weighed on oil, adding pressure after statements from Russia about increasing production. Rosneft, the world's biggest oil producer, noted that it could raise production significantly, according to analysts.
"They suggested that if demand was there, they could raise output by as much as 4 million barrels a day," said ANZ in a note to clients. This was at odds with Russia's previous stance of a joint production cut with the Organization of the Petroleum Exporting Countries. Brent crude, the international oil benchmark, was down 0.4% in morning Asian trade at $ 51.18 a barrel.
Among major energy stocks, shares in Australia's Oil Search were down 2.3%, while Woodside Petroleum fell 1.3%.
The Hong Kong stock market was closed as the city shut down for Typhoon Haima.
—Kosaku Narioka, Tom Fairless, Yifan Xie, Hiroyuki Kachi, Dominique Fong and Jenny Hsu contributed to the article.
Write to Kenan Machado at kenan.machado@wsj.com
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