US-China trade tensions, currencies and stocks in focus
Still, losses in the region were slighter compared to the sell-offs on the back of trade news last month. MSCI's index of shares in Asia Pacific excluding Japan were roughly flat at 3:15 p.m. HK/SIN.
Trump said late on Thursday during U.S. hours that he has told U.S. trade officials to consider $100 billion in extra tariffs against China. The president added that the move would be appropriate given China's "unfair retaliation," although he left the door open for negotiation.
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In response, China's commerce ministry said that it would fight back should the U.S. move forward with protectionist trade measures, Xinhua reported.
Japan's Nikkei 225 slipped 0.36 percent, or 77.9 points, to close at 21,567.52 amid choppy trade. Despite the move lower amid elevated trade tensions, the benchmark finished the week higher by around 0.5 percent.
The broader Topix finished off by 0.31 percent, with the real estate and shipping sectors among the worst-performing.
Meanwhile, South Korea's Kospi slipped 0.33 percent to end at 2,429.58, paring steeper declines seen earlier in the session.
Over in Australia, the S&P/ASX 200 closed flat at 5,788.70, with gains in the materials and energy subindexes offset by declines in heavily weighted financials.
Hong Kong's Hang Seng Index rose 1.09 percent by 3:00 p.m. HK/SIN, shrugging off jitters seen in the rest of the region as markets returned from a one-day holiday. The heavily weighted financials sector traded in positive territory and index heavyweight Tencent advanced 1.96 percent an hour ahead of the market close.
Meanwhile, U.S. stock index futures tumbled following the latest trade-related development, with Dow Jones industrial average futures last lower by around 200 points. S&P 500 and Nasdaq futures also came under pressure during Asia hours.
Earlier, U.S. and European markets had advanced in the last session as trade fears among investors eased in the last session. The Dow rose nearly 1 percent and the pan-European Stoxx 600 surged 2.4 percent on Thursday.
Markets in mainland China, Taiwan and Thailand were closed on Friday.
Trade tensions back in focus
"Capricious policies make for volatile markets," Jack Ablin, chief investment officer of Cresset Wealth Advisors, said regarding Trump's latest statement on tariffs.
China on Wednesday unveiled plans for additional tariffs on 106 U.S. products. That came after the Trump administration released of its list of Chinese imports that could be targeted with proposed tariffs.
Although Trump's Thursday announcement raised concerns that there could be more uncertainty ahead, some in the markets indicated that the move could also be part of Trump's negotiation tactics.
The safe-haven yen pared the gains it made following the latest trade comments from Trump. Against the yen, the dollar traded at 107.38 by 2:45 p.m. HK/SIN, trading at levels seen before the statement.
The dollar had touched its highest levels against the yen in three weeks in the overnight session amid improved investor confidence on Thursday.
"Markets are digesting the fact that most of the tough trade tariff talk is unlikely to result in action that will upset global growth or even come to fruition," Richard Grace, chief currency strategist and head of international economics at Commonwealth Bank of Australia, said in a morning note regarding the dollar's overnight move higher.
The dollar index, which tracks the U.S. currency against six peers, firmed slightly to trade at 90.469.
Besides concerns related to the possibility of a trade war, investors also awaited the release of U.S. March nonfarm payrolls due during U.S. hours. Economists estimated around 193,000 jobs were likely added last month, according to a Reuters poll.
In corporate news, Samsung Electronics said its first-quarter operating profit was expected to climb 57.6 percent compared to one year ago, Reuters said. The forecast profit of 15.6 trillion won ($14.7 billion) was above a Thomson Reuters estimate of 14.5 trillion won. Samsung stock was down 0.7 percent.
Meanwhile, shares of Takeda Pharmaceutical tumbled 5.03 percent. The decline came on the back of comments from its CEO, who made the case for buying London-listed drugmaker Shire at a Thursday briefing, Reuters reported.
— CNBC's Patti Domm contributed to this report.
European stocks close lower amid escalating trade tensions
Europe's auto stocks led the losses on Friday, down almost 1.7 percent amid heightened trade tensions. Schaeffler and Hella were among the worst sectoral performers, down 1.33 and 1.57 percent respectively.
Basic resources stocks — with their heavy exposure to China — were among the worst performers, down 1.6 percent. Rio Tinto was among the hardest hit after Exane BNP Paribas cut its stock recommendation to a "neutral" from "outperform." Shares of the mining giant were off more than 2.3 percent on the news.
Looking at individual stocks, Telecom Italia surged to the top of the European benchmark. On Thursday, Reuters reported, citing three unnamed sources, that Italian state lender CDP intends to buy a stake of up to 5 percent in the firm. Shares of Telecom Italia shot up by almost 7 percent.
Dufry was among the top performing European stocks, after the firm proposed a dividend and announced it would launch a share buyback plan. Kepler Chevreux then upgraded its target price for the Swiss travel retailer shortly after the opening bell, supporting a move higher. Shares of Dufry were up 3 percent.
Late on Thursday, President Donald Trump instructed the U.S. Trade Representative to consider $100 billion of additional tariffs on Chinese goods. The further charges were being proposed "in light of China's unfair retaliation" against prior U.S. trade actions, Trump said in a statement.
Dow plunges more than 500 points as trade war fears rattle Wall Street
The Dow Jones industrial average fell 593 points, with Boeing and Caterpillar as the biggest decliners in the index. The S&P 500 declined more than 2 percent, with industrials as the worst-performing sector. The Nasdaq composite dropped 2.2 percent.
The sell-off accelerated in the final two hours of trading after Fed Chief Jerome Powell indicated the central bank would continue hiking rates this year. Some traders were hoping the Fed Chief would acknowledge the recent market volatility caused by the trade dispute.
"This is truly a reaction to China," said JJ Kinahan, chief market strategist at TD Ameritrade. "What we've seen with this administration is a trend of a big statement, followed by everyone getting riled up, and then a pragmatic solution is found."
"Cooler heads may prevail moving forward," Kinahan said.
U.S. stock futures plunged overnight on the news, while global stock markets fell. China's Commerce Ministry said Friday the country will not hesitate to react with a "major response" to the new tariffs from the U.S.
Trump later tweeted on Friday: "China, which is a great economic power, is considered a Developing Nation within the World Trade Organization. They therefore get tremendous perks and advantages, especially over the U.S. Does anybody think this is fair. We were badly represented. The WTO is unfair to U.S."
Boeing and Caterpillar, two companies that could be adversely affected by a trade war with China, both fell more than 3.5 percent.
Shares of large-cap tech companies also fell. Apple and Amazon both declined more than 2 percent, while Netflix dropped 2.2 percent after briefly trading higher.
Stocks briefly came off their lows in midday trading after an official from Mexico's economic ministry said the person was "very convinced" a new deal on NAFTA will be reached soon.
But the major indexes resumed their decline after Treasury Secretary Steven Mnuchin said there was a possibility of a trade war with China.
"If this leads to more tariffs that's going to be hurtful to the economy," said Scott Clemons, chief investment strategist at Brown Brothers Harriman.
The move lower in stocks also follows the release of much weaker-than-expected jobs data. The Labor Department reported the U.S. economy added 103,000 jobs in March. Economists polled by Reuters expected a gain of 193,000.
"I'd call this one a mixed bag. The headline number may disappoint but there's more than meets the eye," said Mike Loewengart, vice president of investment strategy at E-Trade, noting that wages improved and unemployment remains at historically low levels.
"For investors, today's report may be a tough one to swallow when coupled with a trade standoff that seems to be intensifying with each passing day," Loewengart said.