Japan's Nikkei began the day on a high as traders picked up cheap stocks following Wednesday's late fall caused by news that authorities in the capital had found dangerously high levels of radioactive iodine in tap water.
However, the index fell back to end the day 0.15 percent, or 14.46points, lower at 9,435 on reports of more smoke rising from the Fukushima No.1 plant, which was hammered by the deadly March 11 quake and tsunami.
The market did briefly find positive territory in the afternoon after news that the radioactive iodine levels were now safe, but nervousness soon returned.
Leakages from the Fukushima No.1 complex have found their way into the local environment, leading governments including the United States, Russia, Australia, Hong Kong, Canada and Singapore to ban Japanese food imports.
Regional markets were broadly higher following last week's heavy sell-off.
Hong Kong ended 0.39 percent higher, adding 89.88 points to 22,915.28 while Sydney added 1.01 percent, or 47.2 points, to close at 4,699.6 and Seoul gained 1.22 percent, or 24.60 points, to 2,036.78.
Indian shares rose 0.79 percent, its third straight day of gains.
Shanghai was flat, edging down 1.77 points to 2,946.71.
On the Nikkei exporters continue to be hurt as they are forced to keep plants closed, halting production and adding to growing concerns about the economic cost of the double tragedy and nuclear crisis.
Toyota fell 2.72 percent to 3,215 yen on news it expects to be forced to halt some production at its North American plants due to supply line problems. Nissan closed down 4.55 percent to 671 yen and Sony fell 1.77 percent to 2,550.
Plant operator TEPCO dropped 14.01 percent to 902 yen after it said Wednesday it had withdrawn its earlier plan to pay a year-end dividend of 30 yen as it gauges the impact of the quake on its earnings.
But the water scare lent support to drinks manufacturers on expectations for increased demand for bottled water and beverages.
Tatsunori Kawai, chief strategist at kabu.com Securities, said government estimates that the nation was facing a $309 billion bill only accounted for the quake-tsunami and did not include subsequent problems at Fukushima.
"The impact of the quake is bigger than expected," Yoshihiro Okumura, general manager at Chibagin Asset Management, told Dow Jones Newswires.
The yen remained in a tight range against the dollar after the Group of Seven joint intervention in currency markets on Friday. The Japanese unit was at 80.87 against the greenback, slightly up from 80.93 late Wednesday in New York.
However, the euro fell to 113.92 yen from 114.61 after Portugal's Prime Minister Jose Socrates resigned following parliament's rejection of an austerity package, which could mean Lisbon will need an international bailout.
The loss will deal a blow to the eurozone, which has been hammered by a sovereign debt crisis in which Ireland and Greece have already gone cap-in-hand to the European Union and International Monetary Fund.
The euro also traded at $1.4083, from $1.4080 late Thursday. It had been sitting at $1.4186 ahead of the vote.
On oil markets crude slipped slightly after US data showed a rise in stockpiles, although continuing troubles across the Middle East and North Africa provided support.
New York's main contract, light sweet crude for delivery in May, lost 28 cents to $105.47 per barrel while Brent North Sea crude for May was down 32 cents to $115.23.
Among "the bearish news yesterday was the buildup of inventories data Crude stockpiles rose 2.1 million barrels last week, which was more than expected," said Phillip Futures analyst Ong Yi Ling in Singapore.
But traders are monitoring the wave of unrest in the oil-rich Arab world, which has seen anti-government protests in Yemen, Bahrain and Syria while Libya is still being hit by UN-backed air strikes, slashing crude exports.
Gold closed at $1,437.50-$1,438.50 an ounce in Hong Kong, up from Wednesday's close of $1,428.00-$1,429.00.
In other markets:
-- Singapore closed up 0.69 percent, or 20.84 points, at 3,043.03.
Oversea-Chinese Banking Corp gained 0.54 percent to Sg$9.30 while SingTel fell 0.68 percent to Sg$2.92.
-- Wellington rose 0.34 percent, or 11.46 points, to end at 3,387.25.
Dealers welcomed data showing gross domestic product grew 0.2 percent in the October-December quarter, narrowly avoiding slipping into recession after a contraction in the previous three months.
Officials said performance was hampered by an earthquake in Christchurch in September, which claimed no lives but caused extensive damage.
However, a second quake in the city in February that caused even more destruction and killed an estimated 182 people will likely cripple growth in the first half of 2011, the government said.
Fletcher Building added 1.1 percent to NZ$8.95 but Telecom dipped 0.3 percent to NZ$2.00.
-- Taipei gained 0.37 percent, or 31.32 points, to 8,576.40.
Hon Hai was up 1.46 percent at Tw$104.5 while Taiwan Semiconductor Manufacturing Co added 1.02 percent at Tw$69.4.
-- Manila closed 0.36 percent, or 13.98 points, lower at 3,841.54.
Semirara Mining fell 4.7 percent 216.20 pesos, International Container Terminal was unchanged at 41.00 pesos and Digital Telecommunications was off 2.4 percent at 1.62.
-- Jakarta rose 1.56 percent, or 55.40 points, to 3,611.64.
Coal producer Bumi rose 2.4 percent to 3,200 rupiah, coking coal producer Borneo Lumbung gained 6.5 percent to 1,665 and Telkom added 5.2 percent to 7,150.
-- Kuala Lumpur closed up 0.12 percent, or 1.87 points, at 1,513.84.
Budget carrier AirAsia gained 2.0 percent to 2.70 ringgit, casinooperator Genting Malaysia added 0.4 percent to 3.55, Petronas Chemicals rose 0.4 percent to 6.76 while utility giant Tenaga Malaysia fell 0.8 percent to 6.13 ringgit.
-- Bangkok gained 0.67 percent, or 6.85 points, to close at 1,034.39.
Coal producer Banpu jumped 18.00 baht to 766.00 baht and PTT added 2.00 baht to 347.00 baht.
-- In India, the benchmark 30-share Sensex Index closed up 144.58 points to 18,350.74.
India's largest private aluminium producer Hindalco rose 4.25 percent or 8.35 rupees to 204.75 while its largest software exporter Tata Consultancy Services (TCS) rose 2.76 percent or 29.35 rupees to 1,093.45.