Japan's Nikkei average fell 1.5 per cent today as mobile phone operator KDDI sank on disappointing earnings, while steelmaker JFE Holdings lost ground after not issuing an annual earnings forecast.
Car manufacturers' shares also dropped on news that US automaker Chrysler was readying a bankruptcy plan although it was still keen to forge an deal with Italy's Fiat with one week to go before its government-imposed deadline.
US government data showed existing homes sales fell in March to a much lower-than-expected annual rate, while weekly initial jobless claims rose slightly more than expected.
But Mizuho Financial Group and other major banks gained after better-than-expected results for a handful of US regional banks, despite Mizuho's warning that it would fall to an annual net loss of $5.9 billion.
Analysts said that in addition to positive sentiment carried over from US trade and the view that the worst of Mizuho's woes were behind it, the sector was simply ripe for short-covering.
Mizuho had lost 11 per cent between April 9th and Thursday while Sumitomo Mitsui had fallen 17 per cent over the same period.
The benchmark Nikkei shed 131.06 points to 8,715.95, while the broader Topix slipped 0.9 pe rcent to 831.77.
Most in the market said the Nikkei was likely to move in a tight range over the next week or so, solidly supported but with investors skittish ahead of the results of U.S. bank "stress tests".
Those results are due out on May 4th, but US regulators begin discussing their findings with the banks on Friday and officials will outline publicly the process they followed.
Among the biggest drags on the Nikkei 225 was KDDI, Japan's second-biggest wireless carrier, which sank 5.2 per cent to 440,000 yen.
Shares in JFE slid 3.3 per cent to 2,820 yen, extending losses after Goldman Sachs downgraded its ratings on its and Nippon Steel's to "sell" from "neutral", saying further upside in their stock prices appears to be limited after sharp gains.
Nippon Steel shed 3.9 per cent to 341 yen.
Among gainers, Mizuho jumped 4.7 per cent to 201 yen and Sumitomo Mitsui Financial Group rose 4.9 per cent to 3,100 yen. The banking sub-index climbed 2.1 per cent, one of the top gainers among the subindexes. Honda slid 2.5 per cent to 2,690 yen and Nissan shed 3.9 per cent to 499 yen. Toyota fell 1.3 per cent to 3,840 yen.