NSANY Nissan Motor Company Ltd (PK)

Asian shares were broadly weaker early Friday, as the odds of an interest-rate rise in the U.S. increased again, while oil prices gave up recent gains.

Australia's S&P/ASX 200 was flat, while the Korea Kospi fell by 0.3%, and Singapore's Straits Times Index was also off 0.3%.

Japan's Nikkei Stock Average gained 0.2%, the key outperformer in the region, as a stronger U.S. dollar weighed on the yen. A cheaper yen helps Japan's exports remain competitive while boosting profits at companies from their earnings overseas.

Among key export stocks, Nissan Motor gained 1.1%, while Honda Motor rose 0.8%.

Shares of gaming firm Nintendo slumped 6.1%, reflecting market disappointment after the game maker said that its next videogame platform would be a console-handheld hybrid. Analysts had expected that Nintendo would focus on software titles that run on Sony's PlayStation or Microsoft's Xbox consoles, or at the very least on the mobile gaming market.

"The announcement was largely in line with previous speculation, and it wasn't a catalyst to boost shares," said Yoshinori Ogawa, a strategist at Okasan Securities.

In early Asian trade, the U.S. dollar gained 0.1% against the Japanese yen. The greenback also gained 0.4% against the Philippine peso and 0.3% against the New Taiwan Dollar.

Gains in the dollar Friday also came as the euro weakened, and as the odds of an increase in interest rates in the U.S. in December rose to 73.6% from 69.5% a day earlier. The likelihood increased amid hopes that robust corporate earnings would give the Federal Reserve enough room to squeeze in a rate increase.

"It is the pace of change in the dollar market that is a cause of concern," said Chris Weston, the chief market strategist at IG. "A Fed hike in December is more of a mainstream view now."

The stronger dollar weighed on oil, adding to pressure from statements from Russia about increasing production. Rosneft, the world's biggest oil producer, noted that it could raise production significantly, according to analysts.

"They suggested that if demand was there, they could raise output by as much as 4 million barrels a day," said ANZ in a note to clients. This was at odds with Russia's previous stance of a joint production cut with the Organization of the Petroleum Exporting Countries member states. Brent crude, the international oil benchmark, was down 0.1% early Asian trade at $51.29 a barrel.

Among major energy stocks, shares in Australia's Oil Search were down 2.4%, while Woodside Petroleum fell 0.9%.

In China, the Shanghai Composite Index was down 0.1% as concerns over a weakening yuan overshadowed the positive impact from latest housing price data, which showed that the frenzy over real estate had slowed down.

China's central bank Friday fixed the midpoint reference rate for onshore yuan against U.S. dollar to a new six-year low, renewing worries over the continued depreciation of the currency.

"The market should face more correction, because investors are on the fence as to whether to divert funds from properties to equities," said Zhang Xin, an analyst at Guotai Junan Securities.

Meanwhile, the Hong Kong stock market was shut for trading Friday morning as the Asian financial center braced for the impact of Typhoon Haima, one of the strongest storms to hit the city this year.

Kosaku Narioka, Tom Fairless, Yifan Xie and Jenny Hsu contributed to the article.

Write to Kenan Machado at kenan.machado@wsj.com

(END) Dow Jones Newswires

October 20, 2016 23:35 ET (03:35 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.