Asian markets step back from stimulus-driven record highs

"The markets had such a strong run yesterday after the presidential inauguration in the U.S. and the run-up to that, that the lead coming in from the U.S. is a bit messy," said Shane Oliver, chief economist at investment manager AMP Capital in Sydney.

"A lot of the good news is out there. I suspect a fairly flat day."

MSCI's broadest gauge of Asia Pacific stocks outside of Japan was off 0.2% at 722.49 points, a whisker away from its all-time high of 727.31 touched on Thursday.

The index has jumped 3.7% so far this week, reflecting relief over an orderly transition of power in the United States and strong expectations that U.S. stimulus will provide continued support for global assets.

Republicans in the U.S. Congress have indicated they are willing to work with President Joe Biden on his administration's top priority, a $1.9 trillion U.S. fiscal stimulus plan, though some are opposed to the price tag.

Democrats took control of the U.S. Senate on Wednesday, though they will still need Republican support to pass the program.

Australia's benchmark index was down 0.2% while Japan's Nikkei eased 0.4%.

Chinese shares started on the backfoot with the blue-chip CSI300 index down 0.1% and Hong Kong's Hang Seng was off 0.1%.

Overnight on Wall Street, both the S&P 500 and Nasdaq Composite closed at record highs.

The Dow Jones Industrial Average eased a touch, falling into negative territory in the final minutes of trading.

In currency markets, the U.S. dollar picked up against a basket of currencies after three straight days of losses. It is down 0.7% so far this week.

Against the Japanese yen, the dollar has slipped 0.25% so far this week.

The commodity-sensitive Australian dollar is up 0.6% this week while the euro has climbed 0.7% in the period.

The single currency was flat even as European Central Bank (ECB) President Christine Lagarde warned about a renewed surge in COVID-19 infections and the prospect of prolonged restrictions that could challenge the region's economic outlook.

The ECB, which kept interest rates steady on Thursday, also pledged to provide more support for the economy if needed.

The greenback's recent slide has been led by investors ploughing money into higher-yielding currencies on optimism about a rapid economic recovery led by massive U.S. stimulus.

Popular cyptocurrency bitcoin fell to an almost three-week low on Friday on profit-taking and worries about extra regulations.

In commodities, oil prices slipped after an unexpected build-up in U.S. crude stockpiles. [O/R]

Brent was off 23 cents at $55.86 a barrel while U.S. crude inched 26 cents lower to $52.86.