MANILA, Philippines (AP) -- Asian shares mostly retreated Friday after a rally of technology stocks led by Nvidia and Intel pushed Wall Street to more records.

Japan's Nikkei 225 switched from gains to losses and was down nearly 1.4% to 44,667.88 as of early afternoon, after the Bank of Japan decided to keep its benchmark short-term interest rate unchanged at 0.5%. Data released Friday also showed the country's annual inflation in August slowed to a 10-month low at 2.7%, from 3.1% the previous month.

In Chinese markets, Hong Kong's Hang Seng index added 0.1% to 26,576.59 while the Shanghai Composite index was down less than 0.1% to 3,830.65. Investors are awaiting a phone call later Friday between President Donald Trump and China's President Xi Jinping on tariffs and finalizing a deal to allow TikTok to keep operating in the United States.

Australia's S&P/ASX 200 climbed 0.6% to 8,799.80 after losses a day earlier, when data indicated the jobs market was showing signs of softness.

South Korea' Kospi fell 0.7% to 3,436.48. India's BSE Sensex edged down 0.4%, trimming earlier gains. Taiwan's Taiex dipped 0.4%.

Wall Street rolled to more records Thursday as Nvidia and Intel led a rally for technology stocks on the announcement of their deal that includes a $5 billion investment.

The S&P 500 rose 0.5% and is on track for a third straight winning week. The Dow Jones Industrial Average added 124 points, or 0.3%, and the Nasdaq composite climbed 0.9%. All three set all-time highs.

Intel soared 22.8% for its best day since 1987 after Nvidia said it would buy $5 billion of the chipmaker's stock. It's part of a collaboration where the pair will develop products for data centers and personal computers. Nvidia climbed 3.5% and was by far the strongest force lifting the S&P 500 because it's Wall Street's most valuable company.

Encouraging reports on the economy sent Treasury yields climbing in the bond market, meanwhile, including one that said fewer U.S. workers applied for unemployment benefits last week than expected.

That could indicate the pace of layoffs is slowing, and it was a relief after the prior week's data showed a disconcerting leap to a four-year high. The job market has slowed so much that the Federal Reserve on Wednesday cut its main interest rate for the first time this year in order to give it some help.

The Fed also indicated more cuts may be on the way, though Chair Jerome Powell warned that the Fed is in a precarious position and may have to change course quickly. That's because the economy is in an unusual situation where the job market is slowing while inflation is remaining stubbornly high at the same time.

The Fed is in charge of fixing both, but it has only one tool to do so. And helping one by moving interest rates often hurts the other in the short term.

Expectations are high on Wall Street that the Fed will keep cutting interest rates, and an unexpected halt could send stocks tumbling. Critics say stock prices have already shot too high and become too expensive, in part because of heavy bets on continued cuts in rates.

On Wall Street, smaller stocks led the way. They can be some of the biggest beneficiaries of easier interest rates, and the Russell 2000 index of small stocks rallied 2.5% to join its bigger rivals in setting all-time highs. It topped its prior record, which was set in 2021.

In other dealings on Friday, benchmark U.S. crude lost 19 cents to $63.38 per barrel. Brent crude, the international standard, shed 11 cents to $66.81 per barrel.

The U.S. dollar slid to 147.38 yen from 147.92 yen. The euro slipped to $1.1774 from $1.790.

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AP Business Writers Stan Choe contributed from New York.