Asia markets wavered between positive and negative on Friday, in a muted reaction to a fresh stream of hawkish commentary from US Federal Reserve officials.

Japan's benchmark Nikkei 225 index edged up 0.14 percent and the yen strengthened a bit against the US dollar, possibly in a risk-off shift toward the safe-haven currency. The dollar-yen pair was at 110.06 at 8:53 a.m. SIN/HK, compared with levels as high as 110.34 Thursday.

Australia's S&P/ASX 200 index was up 0.24 percent as the energy sector recovered some recent losses, with the subinex up 2.04 percent. South Korea's Kospi inched up 0.21 percent.

The muted reaction to the possibility of tighter US monetary policy may be due to markets under-pricing the possibility of further tightening in US monetary policy, with analysts saying market indicators suggested a roughly 30 percent likelihood of a June interest rate hike.

But it's not clear that a relatively relaxed response would necessarily bite market players, analysts said.

"The markets are complacent about the risks of further tightening over the next couple of years," Julian Jessop, chief global economist at Capital Economics, said in a note Thursday. "Context, however, is everything: the gradual normalization of U.S. interest rates will remain contingent on favorable economic and financial conditions that should limit the downside for asset prices."

Fed officials continued to send clear signals to the market on Thursday that a June interest rate hike could be on the cards.

New York Fed President William Dudley said that June was definitely a live meeting and that he was quite pleased market expectations for the probability of a June or July rate hike had moved up.

Those comments raised analysts' radar over the Fed's likely steps.

"If one of the most dovish members of the central bank thinks that a rate hike is imminent, then perhaps investors really need to re-think and re-price their expectations for tightening this year," said Kathy Lien, managing director for foreign-exchange strategy at BK Asset Management, in a note late Thursday.

Additionally, Richmond Fed President Jeffrey Lacker said on Bloomberg Radio that he was comfortable with four Fed rate hikes in 2016.

The remarks followed the release of the minutes for the Fed's April meeting, which sounded remarkably clear hawkish signals to the market.

That sent the dollar index, which measures the greenback against a basket of currencies, up to tap highs not seen since late March, before trimming gains on Thursday. The dollar index was at 95.327 at 8:54 a.m., after climbing as high as 95.502 Wednesday.

In Asia trade, U.S. crude oil futures for June delivery rose 0.96 percent to USD 48.62 a barrel by 8:56 a.m. SIN/HK after settling nearly flat. Brent was up 0.82 percent at USD 49.21 a barrel.

Among energy plays, Australia-listed Oil Search tacked on 4.63 percent and Woodside added 1.81 percent, retracing recent losses.

Gold shares may be in focus after the price of gold fell as low as USD 1,244.60 an ounce in the U.S. session Thursday. A stronger dollar weighs on the price of gold, in part because it lessens the yellow metal's attractiveness as a potential hedge against inflation.

Australia-listed Alacer Gold tacked on 4.59 percent, but Newcrest fell 1.06 percent.

In Japan, heavily weighted Fast Retailing shed 0.16 percent, dampening the index. Other plays on the domestic consumer were also lower, with Kirin off 0.41 percent and Japan Tobacco off 2.52 percent.

Shares of Hong Kong's Li & Fung may be in focus after shares of its major customer, Wal-Mart, surged more than 9 percent after better-than-expected quarterly results.

The Dow Jones industrial average closed down 91.22 points, or 0.52 percent, at 17,435.40, the S&P 500 closed down 7.59 points, or 0.37 percent, at 2,040.04 and the Nasdaq composite closed down 26.59 points, or 0.56 percent, at 4,712.53.

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First Published:May 20, 2016 7:47 AM IST