SYDNEY – Asian shares were flat and Treasuries held onto gains on Friday ahead of the US non-farm payrolls data, the next big test for investors looking for more signs of a shift from the Federal Reserve, while the dollar nursed heavy losses.

MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.2 percent in early trade. Nonetheless, the index is set to rise 4.2 percent for the week, hovering around the highest level since September.

Japan's Nikkei fell 1.5 percent.

S&P 500 futures eased 0.3 percent, while Nasdaq futures fell 0.4 percent. US shares ended mixed on Thursday after a big rally the day before, buoyed by comments from Fed Chair Jerome Powell that did not sound as hawkish as some had feared.

US data overnight including falling US job openings and contracting US manufacturing activity pointing to signs of easing cost pressure added to evidence that the Fed's rate hikes have cooled the economy.

Shane Oliver, chief economist at AMP Capital, said markets, after the strong recent rally, in some cases are up to around technical resistance levels, and it may take a while to get through those points.

Alan Ruskin, macro strategist at Deutsche Bank, said if the nonfarm payrolls increased by from 50,000 to 150,000 in November, that would be favorable for bonds and equities and keep the US dollar trading on the backfoot.

Economists polled by Reuters expect payrolls likely rose 200,000 in November.

Futures have priced in a 78 percent chance of a rise of 50 basis points at the December's policy meeting, while rates are now expected to peak around 4.75 percent to 5 percent by mid next year, compared with 5 percent to 5.25 percent previously.

In the bond markets, Treasuries held onto their gains after two straight days of rally. The yields on benchmark 10-year Treasury notes were largely steady at 3.5303 percent, compared with its US close of 3.527 percent.

The two-year yield, which rises with traders' expectations of higher Fed fund rates, was little changed at 4.2584 percent, compared with a US close of 4.254 percent.

The US dollar on Friday hovered around its three-month low against a basket of major currencies and was set for a 1.2 percent weekly drop.

The Euro hit a fresh five-month high at $1.0539 while the Japanese yen also scaled a new three-month high against the US dollar.

The Aussie dollar dipped slightly to $0.6796, after blowing past major resistance at 68 cents in the previous session, on Fed pivot hopes.

In the oil market, prices eased ahead of the OPEC's meeting over the weekend.

US crude oil futures fell 0.33 percent to around $81.02 per barrel, after surging to a two-week high of $83.34 in the previous session on a softer dollar.

Brent crude futures eased 0.26 percent to $86.61 per barrel.

Gold was slightly lower. Spot gold was traded at $1799.44 per ounce.