Euro strengthened against the dollar on Friday as the greenback weakened after a benign reading of USA inflation in June and soft retail demand raised doubts the Federal Reserve would increase interest rates later this year. Hong Kong's Hang Seng index was flat at 26,352.50 and the Shanghai Composite Index slipped 0.1 percent to 3,214.71.
Excluding food and energy prices, core consumer prices crept up by 0.1% for the third consecutive month.
The report said consumer prices in June were up by 1.6% compared to the same month a year ago, a deceleration from the 1.9% year-over-year increase growth in May.
USA consumer price inflation fell more sharply than expected, to 1.6% in June from 1.9% in May. Retail sales dropped 0.2 percent last month.
Friday's data came after testimony before Congress this week from Fed Chairwoman Janet Yellen, which also sent yields lower.
The benchmark 10-year U.S. Treasury note US10YT=RR rose 6/32 in price to yield 2.3248 percent. Financial markets were pricing in a 47 percent chance of a 25 basis point rate hike in December, down from 55 per cent before the data, according to CME Group's FedWatch program.
Japan's Nikkei 225 added 0.1 percent to 20,118.86 and South Korea's Kospi rose 0.2 percent to 2,413.53.
It is now in a range of 1 percent to 1.25 percent. The pound has taken some support from a round of hawkish signals from Bank of England policymakers last week, and there are still some in the market looking out for a rise in interest rates next month. If the Fed's assessment that the softness in CPI between February and May is transitory, the Fed will go ahead with its plan.
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Investors interpreted Ms. Yellen's comments as "modestly dovish" and Friday's data "helps feed into that view", said John Canavan, market analyst at Stone and McCarthy Research Associates.
MSCI's broadest index of Asia-Pacific shares outside Japan ticked up 0.3 per cent. Japan's yen-sensitive Nikkei slid 0.4 per cent on the yen's gains but MSCI's dollar-denominated Japan index gained 0.5 per cent.
The New Zealand dollar another high-earning currency that has gained from significant risk appetite this week, shed 0.02 percent to 0.7318 after reaching an eight-month peak of 0.7369 on Thursday.
But industrial production rose 0.4%, just above expectations, with May revised up to a slim gain, the Federal Reserve reported. The 10 yr yield is down by 5 bps and the 2s/10s spread is narrowing by 2 bps.
Gold prices jumped 1.4 percent to the highest level in almost two weeks on Friday after data pointed to weak US inflation, reaffirming doubts that the USA central bank would again hike interest rates this year. It earlier fell to 2.279 percent, its lowest since June 30.
Ten of the 11 major S&P sectors rose, with information technology .SPLRCT up 0.89 percent to lead the advancers. The contract gained 59 cents, or 1.3 percent, to settle at $46.08 per barrel on Thursday.
United States crude futures rose 1.8 per cent to $45.83 per barrel, extending their recovery from Monday's near two-week low of $43.65.