Asia-Pacific markets fall as rotation out of tech continues; Japan headline inflation holds steady

Asia-Pacific markets fell on Friday as investors on Wall Street continued to rotate out of tech stocks and take profits from the rally in equities in recent weeks.

"There's some profit taking," said Keith Buchanan, senior portfolio manager at Globalt Investments. "I kind of cringe a bit if the profit taking occurs five days into a trade, but that just shows us the magnitude of what we've seen as far as the rotation."

Over in Asia, traders will be on the lookout for continued rotation out of tech in the region after chip-related stocks plunged Thursday across Taiwan, Japan and South Korea.

Japan's inflation came in at 2.8% for June unchanged from May, while core inflation, which strips out prices of fresh food, accelerated to 2.6%, from 2.5%.

However, the core inflation reading was lower than the 2.7% expected by a Reuters poll of economists.

Japan's Nikkei 225 slipped 0.16% after the inflation report, while the broad-based Topix was down 0.28%.

South Korea's Kospi fell 0.93%, while the small-cap Kosdaq lost 0.29%

Australia's S&P/ASX 200 led losses in Asia, tumbling 1.23%.

Hong Kong's Hang Seng index futures were at 17,582, also lower than the HSI's last close of 17,778.41.

Overnight in the U.S., all three major indexes fell, with the Dow Jones Industrial Average down 1.29%, while the S&P 500 dropped 0.78%. The technology-heavy Nasdaq Composite lost 0.7%.

—CNBC's Alex Harring and Sarah Min contributed to this report.