The LDP-Komeito ruling coalition lost its majority in the Upper House, and the government with a minority in both houses is likely to face more pressure to expand fiscal spending.
Investors lacked enthusiasm and awaited possible new measures to revive the property market and tackle excessive competition in renewable energy, electric vehicle, and lithium battery manufacturing.
Japan's political uncertainty ahead of this weekend's election kept weekly gains in check, and the yen hovered at a three-year low. Consumer price inflation slows to a three-month low, and core inflation eases to a 7-month low.
Benchmark indexes in China and Hong Kong extended weekly advances, tracking gains in New York. Internet platform operators and EV makers led gainers, and property developers led decliners.
Japan's trade surplus narrowed sharply in June after exports fell and imports rose from a year ago. Canada's Alimentation Couche-Tard abandoned its $47 billion bid to acquire Seven & I, the parent company of Seven Eleven.
Chinese authorities pledged to curb excessive competition in the electric vehicle market and take steps to stabilize the industry and price monitoring.
Japan's benchmark indexes were under pressure amid worries that the ruling coalition may lose its grip on power after the Upper House election on Sunday.
China's stocks struggled to advance amid heightened uncertainty about the U.S. trade policy and persistent weakness in the residential property market.
China's exports and trade surplus expanded in the first half, despite a widening rift with the U.S., driven by a rise in exports of renewable energy products, electrical vehicles, and household appliances.
Japan's policymakers and politicians intensified debate to reduce reliance on U.S. exports and defense amid growing resistance to the unilateral tariffs proposed by the U.S. president.
Economists are lowering the economic growth outlook for the second half, driven by the persistent weak domestic demand growth and volatile U.S. trade policy.
China's two inflation reports confirm persistent deflationary trend amid weak domestic demand and uncertain export outlook. Five new Hong Kong listing raised a combined HK $10.4 billion, amid improved market sentiment and regulatory support.