Team-mate Marc Marquez and Monster Yamaha Tech3's Cal Crutchlow were the next quickest with Jorge Lorenzo, the current record holder, only clocking the sixth fastest time.
The MotoGP racers missed the rain which had fallen earlier in the day and 2012 Sepang winner Pedrosa - also fastest during the first morning session - recorded two minutes and 00.554 seconds.
That time was half a second quicker than Marquez, who holds a 39-point lead over reigning champion Lorenzo with four rounds of the season remaining and escaped a potential grid penalty for this weekend following a Race Direction hearing on Thursday in the wake of his clash with Honda team-mate Pedrosa in the previous race at Aragon.
British rider Crutchlow finished Free Practice 2 with a lap of 2mins 01.423secs, with Yamaha Factory Racing's Valentino Rossi and Honda Gresini's Alvaro Bautista completing the top six ahead of Lorenzo.
Bradley Smith was 10th with 2:02.551 on his Monster Yamaha Tech3.