Japan's Nikkei skidded on Friday, wiping out this week's gains amid an otherwise subdued Asian session, after weaker-than-expected spending data underscored the scourge of inflation as bets grew that the Bank of Japan would hike interest rates.

In Hong Kong, the benchmark Hang Seng Index lost 102 points, or 0.4 percent, to open at 25,833.

On the mainland, the benchmark Shanghai Composite Index was down 0.07 percent at 3,873 while the Shenzhen Component Index was 0.1 percent higher at 13,020 and the ChiNext Index, which tracks China's Nasdaq-style board of growth enterprises, was up 0.55 percent at 3,084.

In Tokyo, the Nikkei 225 fell 1.5 percent and was on track to end the week mostly flat.

MSCI's broadest index of Asia-Pacific shares outside Japan was off 0.1 percent, but was still set for a gain of 0.5 percent for the week.

Data showed household spending in Japan unexpectedly fell the fastest in nearly two years in October as inflation ate into people's spending power.

The yield on 10-year Japanese government bonds hit 1.94 percent early in Asia, its highest since mid-2007.

The benchmark yield was on track for a 13.5 basis point rise this week, marking the steepest five-day climb since March, but recent strong auction results suggested the cheap bond prices are drawing buyers into the market.

"In previous cycles, moves of that size would have rattled markets. Instead, demand strengthened," said Nigel Green, chief executive at deVere Group.

"Capital flows are shifting, long-standing expectations are being tested, and portfolios built around permanently cheap yen now face a very different world."

A quarter-point rate hike from the Bank of Japan later this month is now being priced at 75 percent, after governor Kazuo Ueda told investors on Monday the central bank would weigh the "pros and cons" of raising interest rates.

The US personal consumption expenditures price index for September is due later in the day – an outdated reading given the release has been delayed by the US government shutdown.

Forecasts are centred on a 0.2 percent rise in the core measure, leaving the annual rate unchanged at 2.9 percent.

The US non-farm payrolls report will not be released on Friday.

Data on Thursday showed jobless claims dived last week, assuaging concerns of a sharp deterioration in the labour market, but that might be due to the Thanksgiving holiday. (Reuters/Xinhua)