Data showing Japanese inflation rose more than expected last month did little to help the yen, which took a hefty hit from the US central bank's more hawkish tilt and the Bank of Japan's refusal to tighten monetary policy.
Traders are now awaiting the release later in the day of data on US personal consumption expenditure -- the Fed's preferred gauge of inflation and the last major piece of data for the year.
Wall Street provided a meek lead, having squandered an early bounce from Wednesday's plunge that was sparked by the Fed's changed rate forecast, with sentiment weighed by a jump in Treasury yields to their highest level since May.
Asia also struggled to recover from the previous day's losses.
Tokyo, Shanghai, Manila and Jakarta edged up, but Hong Kong, Sydney, Singapore, Seoul, Wellington and Taipei sank.
US monetary policymakers on Wednesday cut rates as expected, but their closely watched "dot pot" guidance on future moves showed they saw two reductions next year, compared with four previously targeted.
Data showing a forecast-topping rise in US economic growth and consumer spending did little to ease concerns that the Fed will keep borrowing costs higher for longer.
Meanwhile, swaps markets are pricing in less than two for all of 2025.
Fed boss Jerome Powell acknowledged Wednesday that Trump's economic plans, including tariff hikes, tax cuts and mass deportations, have been a consideration as policymakers weigh their rate cut estimates.
"Some did identify policy uncertainty as one of the reasons for their writing down more uncertainty around inflation," he said after the Fed's announcement Wednesday.
Investors are keeping a watch on developments in Washington after the House of Representatives rejected a Republican-led funding bill to avert a government shutdown, with federal agencies due to run out of cash on Friday night and cease operations starting this weekend.
The legislation would have kept the government open through March and suspended the borrowing limit for president-elect Donald Trump's first two years in office.
But it was sunk by Republican debt hawks, dealing a blow to their leader and his incoming "efficiency czar" Elon Musk, who had put the package forward after sabotaging a bipartisan one amid complaints about items in the text allegedly ballooning its overall cost.
The dollar held on to its latest gains against its major peers, sitting at a five-month high near 158 yen, with some observers suggesting Japanese officials could be eyeing a possible intervention in currency markets.
The greenback was also at a two-year high against the euro.
- Key figures around 0230 GMT -
Tokyo - Nikkei 225: UP 0.2 percent at 38,889.95 (break)
Hong Kong - Hang Seng Index: DOWN 0.2 percent at 19,709.82
Shanghai - Composite: UP 0.1 percent at 3,372.82
Euro/dollar: UP at $1.0365 from $1.0364 on Thursday
Pound/dollar: DOWN at $1.2493 from $1.2496
Dollar/yen: UP at 157.40 yen from 157.35 yen
Euro/pound: UP at 82.97 pence from 82.91 pence
West Texas Intermediate: DOWN 0.3 percent at $69.15 per barrel
Brent North Sea Crude: DOWN 0.4 percent at $72.60 per barrel
New York - Dow: UP less than 0.1 percent at 42,342.24 (close)
London - FTSE 100: DOWN 1.1 percent at 8,105.32 (close)
dan/cwl
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