"The Spanish downgrading news prompted investors to shun risks for now," said Tomohiro Ishikawa, dealer at Chuo Mitsui Trust and Banking.

"Amid uncertainties over the course of the Middle East situation, investors are moving to avert possible risks over the weekend," Ishikawa said, noting that the market is subject to adjustments before the weekend. US officials said the momentum in the Libyan conflict was shifting in favour of Moamer Qadhafi, whose forces are "robustly equipped" with Russian weapons. Protests in Saudi Arabia saw police shoot and wound three Shiite protesters in the oil-rich Eastern Province while trying to disperse a protest calling for the release of prisoners. China said its February consumer price index was up 4.9 percent on-year, unchanged from January and higher than expectations of a 4.8 percent rise according to a Dow Jones Newswires poll of analysts. Data Thursday showing a surprise Chinese trade deficit in February raised worries about the global economy. The trade deficit of $7.3 billion compared with a surplus of $6.45 billion in January, and a surplus of $7.61 billion in February last year, customs authorities said in a statement. Japan's economy minister Kaoru Yosano said that a stronger yen limited the impact of high oil prices on the Japanese economy, according to Kyodo News.