It was a sluggish Friday for most Asian stock markets, with weakness on Wall Street and a disappointing U.S labor report dampening sentiment across the region.

Japan's Nikkei 225 stock average fell 0.3 percent to 10,558.93 as Prime Minister Naoto Kan's Cabinet resigned en masse. The move paves the way for Kan to reshuffle his lineup later in the day in a bid to revive the economy.

Investors were taking profits after the Nikkei closed at an eight-month high on Thursday, and the dollar's fall under the 83-yen line hurt exporters.

Elsewhere, Hong Kong's Hang Seng index declined 0.1 percent to 24,219.80, the Shanghai Composite index declined 1.1 percent to 2,796.11, and Australia's S&P/ASX 200 was down 0.1 percent at 4,788.70.

Benchmarks in Taiwan, Singapore and New Zealand also fell, while South Korea's Kospi was flat at 2,088.09.

In New York Thursday, stocks retreated after a report found that more people applied for unemployment benefits last week.

The U.S. Labor Department said first-time applications for unemployment benefits rose 35,000 from the week before to 445,000. It was the highest level since October and above what economists had predicted.

But the day also brought better-than-expected earnings from chip giant Intel Corp., which set a strong tone for other technology companies set to report quarterly results. The news bolstered the sector in Asia, with chip equipment maker Tokyo Electron Ltd. jumping 2.8 percent.

The broader Standard and Poor's 500 lost 2.20, or 0.2 percent, to 1,283.76. The Nasdaq composite lost 2.04, or 0.1 percent, to 2,735.29.

In currencies, the dollar was trading at 82.79 yen from 82.79 yen late Thursday. The euro stood at $1.3341 from $1.3360.

The dollar's fall Thursday helped limit U.S. stock losses. It weakened against an index of six currencies after successful bond auctions by Spain and Italy pushed the euro higher.