They said investors hesitated to build fresh positions ahead of the weekend and the US Federal Reserve meeting next week when US interest rates are widely expected to be increased another 25 basis points to 5.25 percent.
Continuing concerns about a possible North Korean long-range missile test added to the negative tone.
The KOSPI index fell 10.21 points at 1,228.62, after trading between 1,210.99 and 1,228.96. Volume was 179 million shares worth 2.27 trillion won (US$2.3 billion). Falls outnumbered rises by 504 to 241.
Hong Kong
Hong Kong share prices closed little changed in cautious trade following Wall Street's losses overnight and ahead of the US Federal Reserve's policy meeting next week, dealers said.
They said the market recovered from modest morning losses in line Tokyo but investors did not feel confident enough to push stocks ahead further.
The Hang Seng Index slipped 17.89 points or 0.11 percent at 15,808.81, off a low of 15,682.81 and a high of 15,828.49. Turnover stood at HK$18.45 billion (US$2.4 billion).
Dealers said they expect trade to be volatile next week given the expiry of Hang Seng June futures contracts, more US economic data and of course the key Fed meeting on interest rates.
"The market mirrored the weak performance of overseas. Some [investors] took profits after [Thursday's] gains. Overall the mood was cautious. Investors would rather wait for next week's Fed meeting before trading aggressively," said Ben Kwong, research head at KGI Asia.
Shanghai
Chinese share prices closed 0.59 percent higher, supported by gains in the telecom sector which helped offset liquidity pressure before the listing of the Bank of China, the country's second largest lender, next month, dealers said.
The market overall continued positive, having risen over the past week, and while there is some concern about the impact on liquidity of the Bank of China's and other Initial Public Offerings (IPOs), the new share issues will help generate fresh interest longer-term.
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