Japan's Nikkei share average ended lower on Friday, as a hawkish U.S. Federal Reserve led investors to a selloff on their return from a national holiday, although strong gains in Chinese stocks limited losses.

Local corporate earnings reports also sharply divided winners and losers.

The Nikkei sank 1.68% to 27,199.74, booking its worst day since Oct. 11, after hitting an early low of 27,032.02 shortly before Chinese markets opened.

The broader Topix sagged 1.29% to 1,915.40.

For the week, the Nikkei rose 0.35%, while the Topix gained about 0.9%.

Wall Street stocks continued their slide on Thursday, a day after Fed Chair Jerome Powell quashed investor hopes for a dovish pivot by saying it was "very premature" to be thinking about pausing rate hikes.

"A situation where there's no clarity on the terminal rate is going to keep markets on edge," said Masahiro Yamaguchi, head of investment research at SMBC Trust Bank.

"It's difficult for stocks to rise amid expectations for higher U.S. rates, and we're in a period of unstable market movement, with investors cautious about downside risks."

However, Japanese investors took some cheer from gains in Chinese equity benchmarks, led by Hong Kong's Hang Seng, which was last up about 6% amid reports of early progress in U.S. checks on Chinese company audits and hopes for COVID restrictions to be relaxed.

Of the Nikkei's 225 components, 182 declined, 39 rose and four were unchanged.

Every sector fell, with rate-sensitive technology shares leading losses with a 2.23% drop. Energy fared best, slipping 0.34%, supported by higher crude prices.

Online company Z Holdings was by far the worst performer, plunging 14.18% after its financial results disappointed.

At the other end, Mitsubishi Motors surged 18.01% following an upward revision to its earnings outlook. (Reporting by Kevin Buckland; Additional reporting by Hiroko Hamada; Editing by Rashmi Aich)