Asian shares tracked Wall Street higher on Friday as still-strong U.S. economic data and robust corporate earnings offset tariff worries, while the yen headed toward a second successive week of loss ahead of Japan's upper house election.

Overnight, the S&P 500 and the Nasdaq again closed at record highs as U.S. data including retail sales and jobless claims beat forecasts, indicating a modest improvement in the economy that should give the Federal Reserve time to gauge the inflation impact from higher U.S. tariffs.

Streaming giant Netflix (NFLX.O), opens new tab beat Wall Street's lofty expectations for second-quarter earnings in part due to a weaker U.S. dollar. Its share price, however, fell 1.8% in after-hours trading, with analysts saying much of the growth had already been priced in.

European share markets are set for a higher open, with EUROSTOXX 50 futures 0.4% higher. Wall Street futures , were up 0.2%.

On Friday, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab rose 0.7% to its highest since late 2021, bringing the weekly gain to 1.5%.

Japan's Nikkei (.N225), opens new tab, however, slipped 0.2%, and the yen slipped 0.1% to 148.77 per dollar and was down about 0.7% this week after polls showed Prime Minister Shigeru Ishiba's coalition was in danger of losing its majority in the election on Sunday.

Data on Friday showed Japan's core inflation slowed in June due to temporary cuts in utility bills but stayed beyond the central bank's 2% target. The rising cost of living, including the soaring price of rice, is among the reasons for Ishiba's declining popularity.

"If PM Ishiba decides to resign on an election loss, USDJPY could easily break above 149.7 as it would usher in an initial period of political turbulence," said Jayati Bharadwaj, head of FX strategy at TD Securities.

"JPY could reverse the recent dramatic weakness if the ruling coalition wins and is able to make swift progress on a trade deal with Trump."

Chinese blue-chips (.CSI300), opens new tab rose 0.4% while Hong Kong's Hang Seng index (.HSI), opens new tab gained 0.8%.

The Tapei-listed shares of TSMC (2330.TW), opens new tab, the world's main producer of advanced AI chips, rose 1.3% after posting record quarterly profit, though it said future income might be affected by U.S. tariffs.

In the foreign exchange market, U.S. the dollar was on the back foot on Friday, having bounced 0.3% overnight against major peers on the strong economic data. For the week, it is headed for a second successive gain of 0.7%, bouncing further from a 3-1/2 year low hit over two weeks ago.

Fed Governor Christopher Waller said on Thursday he continues to believe the central bank should cut interest rates at the end of this month, though most officials who have spoken publicly have signalled no desire to move.

Fed funds futures imply next to no chance of a move on July 30, while a September rate cut is just about 62% priced in.

Treasury yields were slightly lower in Asia. Benchmark 10-year U.S. Treasury yields slipped 3 basis points to 4.4375%, having moved little overnight. Two-year yields also edged 2 bps lower to 3.8944%.

Oil prices extended gains on Friday, after drones strikes on Iraqi Kurdistan oil fields fuelled supply concerns.

U.S. crude rose 0.4% to $67.79 per barrel and Brent also rose 0.4% to $69.77 a barrel. They, however, lost about 0.7% for the week.

Spot gold prices were steady at $3,337 an ounce but were set for a 0.5% weekly loss.