Asian stocks ended the week mixed as the Chinese yuan weakened against the dollar
and as US Federal Reserve Chair Janet Yellen delivered a dovish speech on the economy.
The yuan today fell as much as 0.9% to 6.1808 per dollar, the biggest intraday drop based on data going back to 2007.
Markets are concerned a drop in the currency will spur capital outflows and hurt growth in the world's second biggest economy.
Some have also insinuated that the People's Bank of China (PBoC) might in part have engineered the fall in the yuan to open up trading.
"The tightly controlled currency appears to be reacting to a wave of internal pressures - the PBoC this week said the decline is due to market forces and should not be over-interpreted, however, for anxious investors worried about China's economic outlook and ballooning property market, the decline in the yuan, if pronounced, is a worrying prospect," said Ishaq Siddiqi, Market Strategist at ETX Capital.
Hong Kong's Hang Seng index rose 0.4% while the Shanghai Composite was up 0.44%.
In the US, Yellen delivered an upbeat testimony on the economy and policy before the Senate yesterday.
She said she believes harsh winter weather in the US could be to blame for recent weak data releases and would watch carefully to see if this is the case.
Yellen also reiterated that the Fed will continue to unwind monthly asset purchases until sometime in the fall, although they were not on a "pre-set course".
Also moving markets was political tensions in Ukraine. Ukraine's interior minister accused Russian naval forces of occupying Sevastopol airport in the autonomous region of Crimea. However, Russia's Black Sea Fleet has denied that Russian servicemen are taking part.
Ukraine's parliament has called on the United Nations Security Council to discuss the situation in Crimea. The nation's central bank has also put a 15,000 hryvnia limit on daily bank withdrawals in hard currency.
Japan's Nikkei finished down 0.55%, as housing starts rose less than expected in January, up 12.3% year-on-year in January from December's 18% jump. Analysts had predicted an 15% increase.
On a brighter note, factory output rose in January at the fastest pace in more than two years. Industrial production advanced 10.6%, compared to 7.1% a month earlier, beating estimates for a 9.4% rise.
Retail trade edged up 4.4% in January, ahead of the 3.8% forecast and December's 2.5% rally.
Core inflation stood close to a five-year high at 1.4% in January, up from 1.6% the prior month and beating market expectations of 1.3%.
The jobless rate held at 3.7% in January, as expected.
Household spending gained 1.1% in January, compared to a 0.7% increase in December and the consensus estate of a 0.5% rise.