TOKYO: Asian shares were set to hold on to this week's gains, while the dollar took a breather on Friday after stepping back from seven-month highs as investors grappled with the prospects of higher U.S. borrowing costs and slower global economic growth.

Commodity prices were pressured, with copper near 6-1/2-year lows and a major sea freight index hitting its lowest level on record, underscoring worries over slackening world demand.

Japan's Nikkei .N225 retreated from three-month highs hit on Thursday, falling 0.5 percent as the dollar dipped versus the yen though it is likely to post its fifth consecutive week of gains.

Mainland Chinese shares also held flat, with Shanghai composite .SSEC staying near a three-month high struck on Tuesday.

"Share prices are boosted by ample liquidity. Chinese authorities are desperate to support share prices while the European Central Bank has also clearly indicated an easing in December," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

"People who sold shares in the summer on concerns about a slowdown in China are buying back. But they are turning a blind eye to the poor state of economic fundamentals," he said.

A case in point is copper CMCU3, which is seen as a good gauge of the global economy because of its wide industrial use.

It slumped to a 6-1/2-year low of $4,573.50 per tonne on Thursday and last stood at $4,598.50, down 4.7 percent so far this week.

That would mark the biggest weekly fall since January if sustained by Friday's close, driven by persistent worries that supply cuts won't be enough to offset the pressure on prices caused by weak demand in top user China.

The Baltic Index .BADI, which tracks rates for ships carrying dry bulk commodities and is viewed as a good reflection of the health of world trade, fell to a record low, having fallen 58.8 percent from its peak this year.

"Many economies in Asia and emerging markets are still not doing that good. Demand for raw materials remain very weak," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

Oil prices were also not far from near three-month lows hit earlier this week.