Tokyo's Nikkei started well enough but the early six-year peak attracted profit-takers and nudged it 0.4% lower.
Australian shares had made the running with a rise of 0.3%, heading for a fifth session of gains. MSCI's broadest index of Asia-Pacific shares outside Japan managed to add only 0.1%.
Dealers blamed thin year-end conditions for a failure to match Wall Street, where the Dow had added 0.75% to make another all-time top. The S&P 500 rose 0.47% bringing its gains for the year so far to 29%.
Still, the benchmark Nikkei remains 55% higher for the year, its best annual performance since 1972, driven by Japan's aggressive fiscal and monetary stimulus.
The effort seems to be working with figures out Friday showing Japanese manufacturing activity expanding at the fastest clip in more than seven years while firms added workers at the quickest pace in over six years.
Other data showed Japan's core consumer price inflation running at a five-year high, marking steady progress towards ending a decade-and-a-half of grinding deflation.
All the money printing by the Bank of Japan has lifted the dollar 22% against the yen so far this year in the largest annual rise since 1979.
The greenback was up at 104.93 yen on Friday having been as far as 105.00. Option-related offers are crowded around the 105 level making it tough resistance.
The euro also hit a five-year high of 143.87 yen, and was last at 143.73. The single currency was a shade firmer on the dollar at $1.3703, but still some way off last week's high of $1.3811.
While the euro zone's recovery is seen as sluggish, the currency has been underpinned by European banks' repatriation as well as buying by euro zone exporters as the region's current account surplus has increased sharply.
Supporting the dollar has been a rise in U.S. Treasury yields, with the 10-year note touching 3 percent again.
When yields got to these heights back in September it spooked the equity markets, in part because of fears rising mortgage rates would hurt the recovery in housing.
This time a run of upbeat data have reassured investors that the economy can withstand higher borrowing costs.
Figures out on Thursday underlined the improving outlook for jobs as filings for unemployment benefits took a surprisingly sharp drop to 338,000.
MasterCard Advisors SpendingPulse reported sales between November 1 and December 24 rose 2.3%, offsetting concerns that the holiday season had been weak.
In commodity markets, the long rally in equities and a lack of inflation has taken the shine off gold which still look set to suffer its biggest annual loss in three decades. On Friday, the metal was trading at $1,210.00 having failed to sustain a bounce to $1,215.70.
Crude oil futures were boosted by demand for refined products after industry data earlier this week showed a steep decline in gasoline and distillate inventories.
Brent crude settled 10 cents higher at $112.00 a barrel, while U.S. crude firmed 8 cents to $99.63.