Asian stocks were mixed as the Chinese yuan hit a 13-month low and Japan's yen strengthened.
China's yuan has fallen more than 1.2% this week after the central bank doubled the currency's permitted trading range to 2% either side of the fixing.
The People's Bank of China (PBoC) cut the daily fixing 0.21% this week to 6.1475 per dollar
today, the weakest since November 6th.
Stocks in China were higher today, with the Hang Seng index finishing the week up 1.20% and the Shanghai Composite up 2.72%.
Concerns of a slowdown in the world's second largest economy, following the recent release of weak data, have prompted policymakers to consider radical measures to boost financial markets.
"The PBoC has likely moved to an easing policy bias in the face of weak growth," Barclays said.
"However, we think recent CNY depreciation is designed to moderate the pace of capital inflows and FX reserve accumulation, rather than support exports. We expect currency appreciation to resume as growth momentum picks up and trade surpluses return in the second half."
Slowdown fears have seen Chinese equity funds post their biggest outflows. Investors withdrew a net $1.5bn in the week through March 19th, of which $1.3bn came from exchange-traded funds, Citigroup said today, citing EPFR Global.
However, Capital Economics said:
"Our China Activity Proxy (CAP) suggests that renewed fears of a hard landing are overdone and that, although the economy has slowed going into this year, the rate of slowdown does not warrant a significant stimulus response."
The Japenese yen strengthened against the dollar, providing a drag on exporters. The Nikkei ended the session down 1.65%.
International investors are selling Japanese stocks at the fastest pace in almost a decade, government data revealed, on fears the country's government will be unable to follow through on its promises to spur the economy.
Meanwhile, Bank of Japan Governor Haruhiko Kuroda said yesterday that inflation is like likely to reach the central bank's 2% target sometime from the end of fiscal 2014 to the beginning of fiscal 2015.
Kuroda said upward pressure on consumer prices will rise due to improvements in the supply-demand balance. However, he said the positive impact from energy prices will start to fade.
The BOJ last week held its monetary stimulus policy at an annual pace of 60-70 trillion yen. The programme was launched in April last year in an effort to lift inflation.
Meanwhile, tensions over Crimea showed no sign of easing after US President Obama announced the extension of visa bans and asset freezes in Moscow.
The US and the European Union have warned of further sanctions after Russian President Vladimir Putin signed a treaty on Tuesday annexing Crimea from Ukraine to join Russia.
Chinese banks rally
Agricultural Bank of China and Shanghai Pudong Development Bank advanced in Shanghai on expectations lenders may get approval as soon as today to sell preferred shares, according to Jianghai Securities Co.
Li & Fung Ltd. rallied in Hong Kong after the world's largest supplier of clothes and toys to retailers reported profit that exceeded analysts' expectations.
In Japan, Tokyo Electric Power and Sharp Corp. declined. Denso dropped after Credit Suisse cut its price target to 6,200 yen from 6,450 yen.
PetroChina Co. edged higher in Hong Kong as the country's biggest oil and gas producer said it is cutting spending and reported a 12% rise in 2013 net income.