The yen hit a fresh 32-year low in the mid-150 range versus the U.S. dollar Friday in Tokyo, led by dollar buying on the view that the U.S. Federal Reserve will continue with aggressive interest rate hikes.

Tokyo stocks ended modestly lower, weighed down by concerns over a slowdown in the world's largest economy as a result of higher interest rates.

The 225-issue Nikkei Stock Average ended down 116.38 points, or 0.43 percent, from Thursday at 26,890.58. The broader Topix index finished 13.43 points, or 0.71 percent, lower at 1,881.98.

On the top-tier Prime Market, decliners were led by land transportation, air transportation and nonferrous metal issues.

The yen slid further to 150.48 in line with a continued rise in the 10-year U.S. Treasury yield after the Japanese currency breached the symbolic level of the 150 line against the U.S. dollar the previous day.

The benchmark yield kept advancing in after-hours trading following its rise to a new 14-year high overnight, lifted by hawkish remarks from Federal Reserve Bank of Philadelphia President Patrick Harker.

Harker said Thursday that he expects the central bank's benchmark policy rate to "be well above 4 percent" by the end of this year from the current target of 3.00 to 3.25 percent.

The dollar continues to be bought against the yen as the Fed continues to raise interest rates aggressively in an attempt to tame high inflation, while the Bank of Japan sticks to its ultraloose monetary policy, leading to a widening interest rate gap between the two countries.

"Investors were testing the dollar's upside slowly because they want to know if Japan will really intervene in the market, and at what level and under what conditions if it takes action," said Sho Suzuki, a market analyst at Matsui Securities Co.

"There might be a view in the market that the U.S. unit will rebound even if it falls, and intervention can do little to reverse the dollar-buying and yen-selling trend," Suzuki said, adding that the dollar tends to rebound whenever it falls against the Japanese currency.

At 5 p.m., the dollar fetched 150.47-49 yen compared with 150.10-20 yen in New York and 149.86-88 yen in Tokyo at 5 p.m. Thursday.

The euro was quoted at $0.9787-9789 and 147.27-31 yen against $0.9782-9792 and 146.88-98 yen in New York and $0.9786-9788 and 146.66-70 yen in Tokyo late Thursday afternoon.

The yield on the bellwether 10-year Japanese government bond was unchanged from Thursday's close at 0.250 percent as selling following a rise in U.S. government bond yields was offset by a BOJ bond-buying operation aimed at capping the rate's rise.

Japanese shares tracked a decline on Wall Street amid concerns about persisting inflation in the U.S. economy, analysts said.

Air carriers and other issues that drew buying recently lost ground. Japan Airlines shed 59 yen, or 2.1 percent, to 2,778 yen, while ANA Holdings, the parent company of All Nippon Airways, lost 61.5 yen, or 2.1 percent, to 2,905.0 yen.

Among Prime Market issues, declining issues outnumbered advancers 1,422 to 350, while 65 ended unchanged.

Trading volume on the Prime Market fell to 1,026.66 million shares from Thursday's 1,044.53 million.

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