 "Federal Reserve Chair Janet Yellen gestures as she answers a question during a news conference in Washington")
Asian stocks were largely steady on Friday, with modest losses in some markets and gains in others reflecting nervousness before a keenly anticipated speech by US Federal Reserve Chair Janet Yellen.
European markets are also heading for a flat start, with financial spreadbetter CMC Markets expecting Britain's FTSE 100 and Germany's DAX to open little changed, and France's CAC 40 to begin the day down 0.1 per cent.
"The expectation surrounding (Yellen's speech) has been out of all proportion to the likely outcome, which in all probability is likely to be fairly benign," said Michael Hewson, chief market analyst at CMC Markets in London.
"Some in the markets are slowly coming to the realisation that central bankers the world over are fumbling around in the dark as they try to reinvigorate their economies," he added.
MSCI's broadest index of Asia Pacific shares outside Japan was little changed as investors awaited some direction from Yellen on whether the Fed might raise interest rates this year. Yellen will speak at 1400 GMT at the annual gathering of global central bankers in Jackson Hole, Wyoming.
Also Read
The Asia-Pacific benchmark is on track for a 0.3 per cent loss for the week, but is up nearly nine per cent so far this year.
Japan's Nikkei extended losses to close down 1.2 per cent, bringing declines for the week to 1.1 per cent. South Korea's Kospi dropped 0.2 per cent, on track for a 0.9 per cent slide for the week.
Chinese shares, however, recouped the previous session's losses, with some traders attributing the gains to regulators' denial that insurance money is exiting the market.
The CSI 300 and Shanghai Composite indices each rose 0.2 per cent. They're on track for declines of 1.5 per cent and 1.1 per cent, respectively.
US stocks were modestly lower on Thursday, weighed down by a drop in healthcare and consumer companies.
Investors in riskier assets are wary of Yellen hinting at a near-term interest rate hike, which could divert some of the massive liquidity that has underpinned global markets.
"After a week where most markets have barely moved from where they started, there are likely a number of traders who would relish a bit of volatility this evening," Angus Nicholson, market analyst at IG in Melbourne, wrote in a note.
"There certainly is a fear evident in markets that Janet Yellen is going to be surprisingly hawkish and talk up a September hike," added Nicholson.
Hawkish comments from a slew of other Fed officials have already raised markets' expectations of a rate hike this year, though markets are not fully pricing one in till 2017.
On Thursday, several policymakers, including San Francisco Fed President John Williams and Kansas City Fed President Esther George, defended the need to raise interest rates, albeit gradually, to keep the US economy from overheating.
Those comments were roughly in line with the views expressed by Fed policymakers, including Vice-Chair Stanley Fischer earlier in the week, adding to expectations that Yellen's comments would be in a similar vein.
But uncertainty pulled the US currency lower, with the dollar index, which tracks the greenback against six major peers, slipping 0.14 per cent to 94.634. That shrank gains for the week to 0.1 per cent.
The dollar was also 0.1 per cent weaker versus the yen at 100.48 yen, having risen a modest 0.3 per cent so far this week.
The euro was treading water at $1.12920, on track to dip about 0.2 per cent on the week.
The Australian dollar nudged up 0.25 per cent to $0.7637.
Oil prices pulled back from overnight gains, after Saudi Arabia's energy minister tempered expectations of strong market intervention by producers during talks next month, saying the market is already moving in the right direction.
Global benchmark Brent crude lost 0.4 per cent to $49.49 a barrel, eroding some of the 1.3 per cent gains posted overnight and poised for a loss of 2.75 per cent for the week.
US crude oil slipped 0.2 per cent to $47.22 a barrel after rising 56 cents, or one per cent, on Thursday. It's set to end the week 2.7 per cent lower.
Wariness ahead of Yellen's speech gave gold a leg up. Spot gold inched up 0.2 per cent to $1,323.67 an ounce, narrowing this week's losses to 1.3 per cent.
