By Hideyuki Sano and Nichola Saminather
TOKYO/SINGAPORE (Reuters) - Asian shares slid from a 5 1/2-month high on Friday as disappointing earnings from U.S. blue chip companies poured cold water on the rally that took off in March.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.6 percent, a day after it hit its highest level since early November. With that decline, gains for the week shrink to 0.5 percent.
Japan's Nikkei erased earlier losses to briefly hit a 2-1/2 month high. It was trading little changed at 0230 GMT, and on track for a weekly gain of 3 percent.
The Shanghai Composite index also pared earlier losses to barely change for the day, but on track for a loss of 4.4 percent for the week.
Hong Kong's Hang Seng index slid 0.7 percent, narrowing gains for the week to 0.7 percent.
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On Thursday, Wall Street suffered its first loss in four sessions on a mixed bag of quarterly reports and a warning by Verizon Communications that a strike would likely impact its bottom line.
The S&P 500, which came within striking distance of its record closing peak of 2,134.28 touched last May, lost 0.52 percent to 2,091.48.
After the bell, Google parent-company Alphabet, Microsoft, Visa and Starbucks all posted disappointing quarterly reports, sending their stocks down 4 percent or more.
Alphabet, the world's second-largest company by market capitalisation, fell more than 6 percent, taking around $32 billion off its market value.
"Essentially, global shares and commodities have been rallying since U.S. Federal Reserve Chair Janet Yellen had indicated a dovish stance in March," said Norihiro Fujito, senior investment analyst at Mitsubishi UFJ Morgan Stanley Securities.
"But you would need more improvement in economic fundamentals for the rally to go further. The S&P 500 is quite overvalued, trading at 17.8 times the forecast profits. Disappointing earnings from hi-tech companies will surely cap the market," he said.
Oil prices fared better than shares, with strong gains on Friday contributing to one of their biggest weekly gains this year, as producers took advantage of higher prices by locking in production.
Brent crude futures advanced 1.4 percent to $45.17, bringing gains since Monday to 8.2 percent.
U.S. crude rose 1.4 percent to $43.78, up 13 percent since Monday.
Both have surged about 67 percent since their January trough. But despite the recent rally, oil markets remain oversupplied with supply consistently exceeding demand.
The rise in oil prices is thought to be behind a noticeable rise in global bond yields in the past couple of days.
The 10-year U.S. Treasuries yield last stood at 1.861 percent, compared to 1.752 percent at the end of last week. It rose to a three-week high of 1.891 percent on Thursday.
The 10-year German Bunds yield rose to a five-week high of 0.242 percent on Thursday.
The strong Treasury yields have helped underpin the dollar this week, with the U.S. currency on track for a 0.6 percent gain against the yen this week.
It was last trading flat at 109.39 yen.
The yen remains pressured by market speculation that the Bank of Japan could ease policy further as early as next week. The Japanese central bank could either expand its asset purchases or cut interest rates even further into negative territory.
The euro advanced 0.2 percent to $1.1303 following a volatile session overnight but remained off its one-week high of $1.1399 set on Thursday.
The European Central Bank held policy steady at its meeting on Thursday, prompting a rally in the common currency on the view that the central bank won't boost stimulus anytime soon. But a statement by ECB President Mario Draghi that he would use all the tools at his disposal for "as long as needed" sent it skidding back to $1.1270.
Commodity currencies took a breather from their recent rally.
The Australian dollar advanced 0.3 percent to $0.7761 , off its 10-month high of $0.7836 touched the previous day.
(Reporting by Hideyuki Sano and Nichola Saminather; Editing by Eric Meijer and Richard Borsuk)