Nervous investors drove shares lower earlier in the week, after President Trump declared Tuesday that the USA would react with "fire and fury" to further nuclear provocations from North Korea.
The markets may benefit from bargain hunting, as some traders look to pick up stocks at reduced levels following the pullback seen over the past few sessions.
Japanese markets were closed for a holiday, but the tense mood dragged Asian shares lower and an MSCI index of stocks across the globe .miwd00000pus was on track to post its largest weekly drop since the week before Donald Trump won the USA presidential election in November. Trump said on Thursday that his first threat to unleash "fire and fury" may not have been tough enough.
Asian equities extended heavy losses yesterday as a worldwide sell-off triggered by US President Donald Trump doubling down on his North Korea rhetoric showed no sign of abating. MSCI's broadest index of Asia-Pacific shares outside Japan .miapj0000pus closed 1.37 percent lower.
Shane Oliver, head of investment strategy at AMP Capital in Sydney, said: "What has changed this time is that the scary threats and war of words between the USA and North Korea have intensified to the point that markets can't ignore it".
Many world stock markets have hit record or multi-year highs in recent weeks, leaving them vulnerable to a selloff, and the tensions over North Korea have proved to be the trigger. Germany's DAX was flat, while France's CAC 40 fell 1.1 percent.
US government bonds strengthened Friday as soft inflation data led investors to further scale back expectations for interest-rate increases from the Federal Reserve.
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Minneapolis Fed President Neel Kashkari, who has advocated for the Fed to halt interest rate hikes until inflation picks up gain, on Friday said his colleagues are telling each other "a ghost story (http://www.marketwatch.com/story/feds-kashkari-says-central-banks-hawks-are-spooked-by-ghost-story-of-higher-wages-2017-08-11)" about higher wage inflation that scared them into raising short-term rates. The stock fell another 2 cents, or 0.4%, to 5.12 Friday.
Shares Snap fell 1.94, or 14%, to 11.83 after the Snapchat parent reported earnings late Thursday that missed analyst forecasts.
On the currency front, the United States dollar is trading at 108.82 yen compared to the 109.20 yen it fetched at the close of NY trading on Thursday.
"There are four more [inflation] prints between now and the December FOMC meeting and we expect the Fed to remain data-dependent, if a touch more cautious", TD Securities said in a research note. For the week, the benchmark slipped 2.6%. Yields fall when bond prices rise.
Spot gold inched down 0.1 percent to $1,284.64 per ounce as of 0616 GMT, but was set for a weekly gain of over 2 percent.
Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in USA crude inventories.
U.S. crude rose 0.41 per cent to US$48.79 per barrel and Brent was last at US$52.01, up 0.21 per cent.