Japan's Nikkei 225 ended flat while the broader Topix index, which a day earlier surpassed its previous peak set in 1989, also shed some of its gains.

Bets on a second term for the controversial tycoon rose after Thursday's debate, in which he was widely considered to have come out on top after Biden struggled through answers and stumbled over his lines.

Traders were also selling equities across Asia as tech firms came under pressure amid concerns that a long-running rally in the sector may have been overdone and profit-takers stepped in.

With US data indicating the world's top economy remains in rude health and the jobs market still tight, investors remain unsure about the Federal Reserve's plans for interest rates, with debate centred on when -- or even if -- it will cut this year.

A forecast-topping read on the US services sector provided further evidence that the world's top economy remained in rude health and dealt a blow to hopes for interest rate cuts.

A batch of worse-than-forecast US data provided further signs that the world's number one economy was softening, but that was not enough to help push the S&P 500 and Nasdaq to record highs.

Traders are closely following the utterances of US central bank officials on their outlook for rates, with most warning that while inflation was on a downward trajectory, they wanted to see more evidence before committing to a cut.

In Europe, London fell at the open even after data showed UK inflation had eased to the Bank of England's two percent target.

Traders are also keeping an eye on developments in France, with fears growing that a snap legislative election called by President Emmanuel Macron could see right-wing parties succeed and cause political turmoil in the European Union.

The weaker-than-expected May consumer price index marked a second successive month of slowing -- to a more than three-year low -- and boosted optimism that the central bank would be able to soften monetary policy after a long-running campaign of tightening.

Forecasts for the number of reductions the Fed will make in 2024 have been whittled down from six at the start of the year to just three at best now, following a string of figures indicating the labour market remains solid and the economy still in rude health.

The zero growth in April followed an expansion of 0.4% in March, according to the Office for National Statistics.

After an upbeat run last week driven by signs of an easing in the labour market and economy, Friday's forecast-busting non-farm jobs report provided a dose of reality that interest rates might be kept elevated for some time.

Figures on Tuesday showed job openings had fallen more than expected, while Wednesday's ADP private-sector gauge also came in below forecasts.

Figures from payroll firm ADP on Wednesday showed private-sector hiring slowed far more than estimated in May.

Job vacancies fell far more than expected in April, to below 8.1 million, which Briefing.com said was the lowest level since 2021.

The losses came as energy firms were weighed by a further drop in oil that came after OPEC and other major producers said they would begin lifting output before the year's end, calling time on a period of cuts that has kept crude elevated.

With crucial inflation data out of the United States due at the end of the week, investors are largely playing a waiting game, with many inclined to sell after a recent run-up.

Figures last Friday showing US consumer confidence picking up and inflation expectations coming down provided traders enough confidence to propel hopes for at least one interest rate cut before January.

The S&P 500 and Nasdaq both benefited Friday from figures showing one-year expectations for prices edged down slightly while consumer sentiment picked up.

A weeks-long rally in equities has petered out in the past few days on profit-taking and as central bank officials pushed back against bets on an early reduction.

The news, however, was offset slightly by forecast-busting earnings from US tech titan Nvidia that showed profits and revenue soaring.

A slowdown in US inflation and China's announcement last week of plans to support its crucial but battered property sector have helped propel equities but, with that euphoria petering out, traders are taking a breather.

The announcement out of Beijing on Friday provided a much-needed boost to the country's ailing developers, many of whom are drowning in a sea of debt.

All three main indexes in New York as well as London, Paris and Frankfurt turned lower Thursday, having ended at record highs the day before.

There was also some nervousness on trading floors after Beijing hit out at Washington's decision to impose steep tariff hikes on Chinese imports such as electric vehicles and semiconductors.

The gains come as traders turn their attention to the release of key US jobs data due later in the day, which could play a major role in the Federal Reserve's decision-making on when to lower borrowing costs.

It touched 160.17 in morning trade -- its weakest since 1990 -- fanning speculation that Japanese authorities would step in to support their currency for the first time since 2022.

Investors were awaiting the release later in the day of the Federal Reserve's preferred gauge of inflation, personal consumption expenditures (PCE) index, hoping for an idea about its plans for interest rates ahead of next week's policy meeting.

With Iran downplaying a reported Israeli attack on the country, which came days after a drone and missile strike on Israel by Tehran, tensions between the regional foes appeared to have cooled.