Asian markets mostly fell Friday after data pointing to a still-strong US economy raised fresh concerns about inflation and dampened optimism that the Federal Reserve will slash interest rates as much as it expected this year.
Equities across the world surged Thursday in response to the central bank's closely watched dot plot projection that it would lower borrowing costs three times this year, even after figures showed prices ticking up in January and February.
News that the central banks of Switzerland and Mexico had started cutting added to the sense that decision-makers were gearing up to reverse their tightening measures.
All three main US indexes clocked up record highs for a second straight day on the back of a tech rally as traders contemplated an end to the era of two-decade-high rates.
However, Asia struggled to maintain the momentum after a string of data reminded investors that the world's largest economy was still in rude health, resilient to the tighter credit environment.
Sales of existing homes in the United States climbed the most in a year last month, industry figures showed, as buyers got used to elevated borrowing costs, while initial applications for jobless benefits were stuck near historic lows, reinforcing the view that the labour market was still tight.
The purchasing managers index of manufacturing activity has also picked up quicker than expected.
"This could potentially lead the Fed to implement interest rate cuts slower than the market anticipates," warned SPI Asset Management's Stephen Innes.
Rodrigo Catril at National Australia Bank said "the composite measure of prices derived by manufacturers and service providers rose to an almost one-year high on the back of continued wage growth and higher fuel costs, suggesting stubborn inflation".
Most markets were in the red in Asia.
Hong Kong lost more than two percent -- having shed more than three at one point -- as tech firms tanked after a US official said chip maker Semiconductor Manufacturing International Corp "potentially" broke US law by producing a processor for sanctioned telecom giant Huawei.
Shanghai, Sydney, Singapore, Seoul, Bangkok, Manila and Jakarta were also down.
However, Tokyo, Taipei, Mumbai and Wellington rose.
The yen strengthened slightly after the release of figures showing a 2.8 percent jump in Japanese inflation, which sparked debate about whether the country's central bank will follow up this week's interest rate hike -- the first in 17 years -- with further raises.
The currency took a hit Tuesday following a warning from Bank of Japan boss Kazuo Ueda that officials would take their time after shifting away from their long-running policy of negative rates.
Tokyo - Nikkei 225: UP 0.2 percent at 40,888.43 (close)
Hong Kong - Hang Seng Index: DOWN 2.1 percent at 16,505.49
Shanghai - Composite: DOWN 1.0 percent at 3,048.03 (close)
Dollar/yen: DOWN at 151.44 yen from 151.65 yen on Thursday
Euro/dollar: DOWN at $1.0828 from $1.0861
Pound/dollar: DOWN at $1.2625 from $1.2653
Euro/pound: DOWN at 85.77 pence from 85.82 pence
West Texas Intermediate: DOWN 0.7 percent at $80.53 per barrel
Brent North Sea Crude: DOWN 0.7 percent at $85.20 per barrel
New York - Dow: UP 0.7 percent at 39,781.37 (close)
London - FTSE 100: UP 1.9 percent at 7,882.55 (close)
