The Nikkei 225 index in Tokyo shed morning gains after the government released figures that, while showing some strength, fell short. Manufacturing in the world's No. 3 economy rose 1.6 per cent in July from a year earlier and 3.2 per cent from the month before. While that pointed to an economic recovery, analysts had expected to see a 3.6 per cent increase.
Still, the Ministry of Economy, Trade and Industry said it foresaw further expansion in August and September.
"If these forecasts are realised, industrial production momentum will climb to new highs," analysts at Capital Economics said in a commentary.
The Nikkei in Tokyo fell 0.5 per cent to close at 13,388.86. But gains were posted elsewhere in Asia. Hong Kong's Hang Seng rose 0.2 per cent to 21,668.90. South Korea's Kospi gained 1 per cent to 1,926.36. Australia's S&P/ASX 200 added 0.8 per cent to 5,135.
In early European trading, Britain's FTSE 100 fell 0.6 per cent to 6,443.39. Germany's DAX was 0.9 lower at 8,125.11. France's CAC-40 shed 0.8 per cent to 3,953.65.
Wall Street looked set for a sluggish open, with Dow Jones industrial futures falling less than 0.1 per cent to 14,827 while S&P 500 futures were flat at 1,636.70.
Among individual stocks, Virgin Australia Holdings, the country's second-largest airline, fell 3.7 per cent after posting an annual loss of 98 million Australian dollars ($88 million).
Energy companies fell as oil prices continued to retreat from a two-year high. Japanese energy explorer Inpex shed 2 per cent.
On Thursday, lawmakers in the U.K. refrained from authorizing British participation in action against Syria after an alleged chemical weapons attack near Damascus killed more than 300 civilians earlier this month. The U.S. government is considering a response, although the White House says President Barack Obama hasn't decided on when and how big it might be.
That helped calm investor nerves, said Stan Shamu, market strategist at IG in Melbourne, Australia.
"There's been a slight downgrade to Syria fears," Shamu said.
Benchmark oil for October delivery was down $1.20 to $107.60 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.30 to close at $108.80 a barrel on the Nymex on Thursday.
In currencies, the euro rose to $1.3240 from $1.3237 late Thursday. The dollar fell to 98.05 from 98.32 yen.
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