Asian stocks set to close the week in a sluggish mode as the drop in oil prices coupled with weaker China's Yuan was adding to more concerns about the next level of the market. The weaker commodities market is further impacting the Asian stocks.

The glut in oil supplies and slowdown of China's economy continue to dampen the investor confidence. The Asian markets turned into wait and watch mode ahead of US Federal Reserve meeting on interest rates next week.

Chinese stocks turned further weaker ahead of economic data. Asian stocks shed almost three percent during the week.

The slump in China, the world's biggest consumer of commodities, is affecting entire global economy directly or indirectly. Chinese currency Yuan is hovering at 4-1/1 year low.

Yuan against dollar was trading at 6.4498 in the spot market after the August lows. Yuan is at lowest since mid-2011 level.

Chinese economic data is scheduled for release on 12 December. MSCI's broadest index of Asia-Pacific shares outside Japan shed early gains and fell 0.7 percent taking total weekly loss to three percent. 

The People's Bank of China (PBoC) forecasts further weaker currency in over four years, as reported by Reuters.

This works out to be a clear indication that Yuan is set for further depreciation after it's been included in International Monetary Fund's (IMF) reserve basket.

The Yuan's lower fixings are raising many eye brows as analysts question how far the Chinese central bank allows the renminbi to depreciate.

The sluggish commodity trading was also impacting Asian stocks as uncertainty about world growth prospects looming large. Barring Shanghai, remaining Asian indices closed in red. Nikkei fell 1.1 percent to 19,281.46 points.

Hong Kong's Hang Seng shed 0.3 percent to 21,841.81 points. South Korea's Kospi almost remained at 1,948.26 points. Australia's S&P/ASX 200 fell 0.1 percent to 5,105.40 points. Shanghai index rose 0.4 percent to 3,482.59 points. 

As per a report by US News, the overall commodity prices were languishing. Iron ore price fell 43 percent this year so far. The iron price eased further 15 cents to $39.25 a metric ton. The slack demand for commodities is creating more concerns in Asian markets. 

Linus Yip, the chief strategist at First Shanghai Securities, said: "A US rate hike would have a major impact on money flows out of emerging markets including Hong Kong and China. Also, if the Yuan continues to depreciate, that's negative to stocks as well, because it means investors are not confident about China's economic restructuring."

Contrary, the S&P-500 index rose for the first time this week on a rally in energy stocks on the Wall Street, reports Bloomberg. The US stocks rose on Thursday after witnessing weak trading throughout the week. Investors started counting down on US Federal Reserve meeting next week.

This makes S&P 500 index shedding one percent gain in the last session. The Thursday's rebound was the first time since 2.1 percent gain previous Friday (4 December), the latest payroll data further strengthened the expectations for a possible rate hike.  

Bucking the trend, Japan's Nikkei index rose one percent higher as it tracked the overnight gains on Wall Street. The drop in Yen also aided the Japanese stocks rise.

However, Japanese stocks recorded 1.4 percent overall losses for the week. The dollar index, which measures US dollar against six major currencies, rose 0.1 percent to 98.056. But, it needed up the week with a loss of 0.3 percent as investors reduced their holdings in dollar-long positions.

Fed fund futures rate the probability of rate hike to 85 percent in the scheduled meeting during 15-16 December 2015. According to a recent Reuters poll involving 18 brokerages also forecasts rate hike. The US crude oil futures nearing 2009 lows on supply glut position.

The crude oil futures eased 0.7 percent to $36.51 a barrel. Brent shed 0.6 percent to $39.48 per barrel. 

South Africa's rand against US dollar fell to record lows after the dismissal of Finance Minister Nhlanhla Nene to make room for an ally of President Jacob Zuma.