The U.S. dollar struggled for direction on Friday as fears of an economic slowdown dented risk sentiment, while the yen slipped as speculation continue to swirl that the Bank of Japan will eventually move away from its ultra-easy policy.

Most Asian equity markets edged higher on Friday, while the U.S. dollar hung near its weakest level since May, with investors fretting about the risks of a global recession as the Federal Reserve presses on with interest rate increases.

Japan's export growth slowed sharply in December as China-bound shipments fell for the first time in seven months, stoking fears of further slowdown in the global economy and external demand for Japanese shipments.

Japan’s core consumer price index rose as expected to a 41-year high in December, data showed on Friday, signaling more pressure on the economy from rising prices and on the Bank of Japan to potentially tighten monetary policy.

 U.S. producer prices fell more than expected in December as the costs of energy products and food declined, offering more evidence that inflation was receding.

Production at U.S. factories fell more than expected in December and output in the prior month was weaker than previously thought, indicating that manufacturing was rapidly losing momentum as higher borrowing costs hurt demand for goods.