Asian stocks were subdued Friday, after the U.S. market saw its second-slowest trading day of the year and as investors continued to shrug off geopolitical tensions.

The Nikkei slipped 0.2%, following four straight days of gains. Trading activity is expected to stay muted, as Japan enters the third and final day of the annual midsummer "Obon" holiday, during which many domestic investors take time off.

"With a stable dollar, good earnings reports, and a few geopolitical tribulations overseas, stocks could resume their upward trend," said Eiji Kinouchi, chief technical analyst at Daiwa Securities.

The dollar was last wavering near Yen102.5, compared with Yen102.45 in New York late Thursday. It initially slipped after higher-than-expected U.S. jobless claims fueled expectations thatthe country would see lower interest rates for longer. Initial claims for unemployment benefits increased by 21,000 to a seasonally adjusted 311,000 in the week ended Aug. 9, but remained near eight-year lows.

U.S. stocks have seesawed in the past month, as market concerns about the end of the Federal Reserve's easy monetary policy, tensions in Ukraine and an insurgency in Iraq give way to improving economic data, in particular in the labor market.

Elsewhere in Asia, Australia's S&P/ASX 200 was up 0.3% and South Korea's Kospi was trading roughly flat.

Australia's market has seen pressure from a spate of disappointing earnings results. ANZ shares were last down 0.8%, after the firm reported weaker-than-expected profits in the third quarter.

-- Bradford Fischkorn contributed to this article.

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August 14, 2014 22:25 ET (02:25 GMT)

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