U.S. President Donald Trump, in his latest warning to North Korea, said military solutions were "fully in place" and referred to American weapons as being "locked and loaded" should the nuclear-armed nation act "unwisely". "Geopolitical risks don't really influence Korean markets", he said.
Emerging market stocks lost 1.20 percent.
Technology companies were leading a broad slide in US stocks in early trading Thursday as investors pored over the latest batch of corporate earnings reports.
The Vix, a measure of how much volatility investors expect in stocks, jumped to its highest level since May after North Korea revealed a plan to launch ballistic missiles toward a major US military hub in the Pacific.
As reported at 10:55 am (JST) in Tokyo, the USD/JPY was trading at 109.823 Yen, down 0.45%; the pair earlier hit a trough of 109.793 Yen, while the session peak stands at 110.386 Yen.
Smaller-company stocks also fell sharply. South Korea's benchmark equities gauge fell for a second day, dragged by Samsung Electronics Co. and SK Hynix Inc., which both lost more than 3 percent.
Sydney was a rare bright spot in Asia-Pacific with stocks closing 0.4 percent up as Australia's biggest bank posted record annual profits. This is surely welcome news after 2016 was the first year in which overall productivity in the USA dropped since 1982.
"Pretty remarkable, perhaps even extraordinary, considering", said Tim Ash, strategist at fund manager BlueBay.
The yen on Friday added to a strong weekly rally against the dollar of close to 1.5 percent, hitting its highest level versus the greenback in nearly four months, at 108.73 yen. On Tuesday, the DAX added 0.3 percent, the CAC 40 gained 0.2 percent and the FTSE rose 0.1 percent. "The big buy stop orders will be resting above $1,295; I therefore think that gold will probe the resting liquidity above $1,295 in the coming days".
The euro was 0.18 per cent lower against the greenback but remains the best-performing G10 currency so far this year with gains of more than 11 per cent against the dollar.
Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in USA crude inventories, leaving prices volatile.
"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", said TD Securities in a research note. Wholesale price inflation eased to an eight-month low of 2.2% in July from 2.5% in June.
The dollar index, which measures the U.S. currency against a basket of major peers, slipped 0.1 percent as U.S. Treasury yields fell.
Gold futures went up 16.70 dollars or 1.33 percent to close at USD 1,274.60 per troy ounce at the COMEX division of the New York Mercantile Exchange.
The euro dipped 0.1 percent to $1.1733 but the single European currency has been slipping this week against the dollar, having hit a more than 2 1/2-year high of $1.1892 on August 2.