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Asian stocks take a breather after days of declines

Eustance Huang

Shares in Asia traded cautiously on Friday morning on the back of a report suggesting the U.S. Federal Reserve could consider a slower tempo of increasing interest rates than had been previously expected.

The mainland Chinese markets, watched in relation to Beijing's trade dispute with Washington, were cautious in early trade as both the Shanghai composite and the Shenzhen composite were largely flat.

Meanwhile, the Hang Seng index in Hong Kong saw fractional losses.

Japan's Nikkei 225 rose 0.13 percent in morning trade while the Topix index slipped 0.14 percent. Shares of Softbank , which were hit hard in the previous trading day, lost their earlier gains to trade lower by around 0.7 percent. Over in South Korea, the Kospi gained 0.41 percent, with shares of chipmaker SK Hynix rising 1.36 percent.

The ASX 200 in Australia rose 0.51 percent in afternoon trade, with almost sectors in positive territory. That was a rebound from Thursday, when the index saw declines amid a broader sell-off across the Asia Pacific region.

Shares of Australia's so-called Big Four banks gained in the morning. Australia and New Zealand Banking Group traded up by 0.51 percent while Commonwealth Bank of Australia gained 1.15 percent. Meanwhile, Westpac advanced 0.7 percent while National Australia Bank rose 0.75 percent.

Fed may slow pace of rate hikes

In overnight market action on Wall Street, the Dow Jones Industrial Average closed just 79.40 lower at 24,947.67 after dropping nearly 800 points earlier in the session. The S&P 500 slipped 0.15 percent to close at 2,695.95 while the Nasdaq Composite recovered from its intraday losses to end the trading day 0.4 higher at 7,188.26.

That stateside recovery from stocks' session lows came on the back of a report that the Fed could hike interest rates at a slower pace than previously expected. The Wall Street Journal reported on Thursday that the U.S. central bank is considering whether to signal a wait-and-see approach to rate hikes at its upcoming meeting this month. The report said Fed officials do not know what their next move on rates will be after December.

As a part of the Fed's emerging "data dependent" plan, it could choose to pause the regular quarter-point increases to the federal funds rates and not hike in March, the Journal reported Thursday. Federal Open Market Committee officials — who vote on whether to change the rate — have been raising the rate about once per quarter for the past two years.


Bolton 'knew in advance' about Huawei CFO arrest

Part of the broad decline in Asian stocks on Thursday was attributed to news of the arrest of Huawei CFO Meng Wanzhou in Canada. That especially was thought to have hit tech stocks in the region.

Investors will also be keeping an eye on any developments in Meng's case — she is said to face extradition to the U.S .

U.S. National Security Advisor John Bolton said Thursday that he "knew in advance" about the arrest, although President Donald Trump was reportedly not in the know about the plan.

Huawei is one of the largest mobile phone makers in the world and the company has come under pressure from Washington. It faces a restriction on selling telecoms equipment in the U.S. due to what American officials describe as national security concerns.

Beyond just potentially influencing the technology space, the arrest may also have implications for the ongoing U.S.-China trade war . News of Meng's arrest comes after Trump and Chinese President Xi Jinping agreed last weekend to hold off on implementing additional tariffs on each other's goods.

OPEC doesn't commit to a number on production cuts

Following a closely watched OPEC meeting in Vienna on Thursday, the cartel reportedly agreed to decrease oil production but did not specify the exact number of barrels it aimed to bring off the market.

OPEC has agreed in principle to reduce its output, two sources told Reuters on Thursday. However, OPEC delayed making a decision on how deeply it would cut production until after it meets with Russia on Friday. With few details to offer journalists, OPEC canceled a scheduled press conference.

The much-anticipated meeting comes at a time when the oil market is near the bottom of its worst price plunge since the 2008 financial crisis. Oil prices have crashed around 30 percent over the last two months, ratcheting up the pressure on budgets in oil-exporting countries.

Oil prices were lower in the morning of Asian trade on the back of those developments.

The global benchmark Brent crude futures contract declined by 0.85 percent to $59.55 per barrel while U.S. crude futures slipped 0.56 percent to $51.2 per barrel.

Shares of oil-related companies in the Asia Pacific region were also mixed.

Australia's Santos rose 0.35 percent and Beach Energy gained 1.27 percent, while Woodside Petroleum slipped 1.05 percent. Over in Japan, Inpex fell 2.55 percent and JXTG declined by 3.35 percent as Fuji Oil rose 0.83 percent. South Korea's S-Oil lost its earlier gains to trade down by 1.83 percent while China's PetroChina slipped 0.13 percent.

Currencies

The U.S. dollar index , which tracks the greenback against a basket of its peers, was at 96.789 after touching an earlier high of 96.826.

The Japanese yen , widely viewed as a safe-haven currency, traded at 112.68 after a turbulent session yesterday which saw it touching highs around the 112.3 handle. The Australian dollar was at $0.7226 after seeing an earlier high of $0.7237.

— CNBC's Fred Imbert ,Thomas Franck, Sam Meredith and Tom DiChristopher contributed to this report.