Chinese shares, which were up earlier in the day, slipped into negative territory with the blue chips off 0.1 percent. E-Mini futures for the S&P 500 too started firmer but were last down 0.1 percent.
Spreadbetters, however, pointed to a strong start for Europe with London's FTSE futures up 1.8 percent.
There was no escaping concerns over Sino-U.S. relations after the arrest of smartphone maker Huawei Technologies Co Ltd Chief Financial Officer Meng Wanzhou threatened to chill talks on some form of trade truce.
Markets also face a test from U.S. payrolls data later in the session amid speculation the economy was heading for a tough patch after years of solid growth.
Federal Reserve Chairman Jerome Powell emphasised the strength of the labour market in remarks made late Thursday.
Economists polled by Reuters forecast jobs rose by 200,000 in November after surging 250,000 in October.
"A view has developed of U.S. growth normalising a little faster than expected from the fiscal 'sugar rush', while inflationary pressures remain contained given the sharp fall in the oil price," said National Australia Bank economist Tapa Strickland.
"Payrolls will be very important in helping to validate whether the economy is indeed slowing faster than expected."
The mood in risk-asset markets brightened a little after the Wall Street Journal reported Fed officials are considering whether to signal a new wait-and-see mentality after a likely rate increase at their meeting in December.
Yields on two-year notes fell a huge 10 basis points at one stage on Thursday and were last at 2.76 percent.
Investors also steamrolled the yield curve to its flattest in over a decade, a trend that has historically presaged economic slowdowns and even recessions.
"The sort of flattening of the yield curve that we have seen recently usually indicates that investors think the Fed is nearing the end of a tightening cycle, and that rate cuts may even be on the horizon," argued analysts at Capital Economics.
The seismic shock spread far and wide. Yields on 10-year paper sank to the lowest in six months in Germany, almost 12 months in Canada and 16 months in Australia.
The sea change in expectations took a toll on the U.S. dollar as bulls had been counting heavily on a steady widening rate differential to propel the currency.
The greenback eased against a basket of currencies to 96.803 , and fell to 112.85 yen from a 113.85 high at the start of the week. The euro was up around 0.4 percent on the week so far at $1.1366.
Crptocurrency Bitcoin took a fresh spill to be down almost 18 percent for the week at $3,363.37.
In commodity markets, gold firmed to near a five-month peak as the dollar eased and the threat of higher interest rates waned. Spot gold stood at $1,239 per ounce.
Oil was less favoured, however, falling further as OPEC delayed a decision on output cuts while awaiting support from non-OPEC heavyweight Russia.
Brent futures slipped 52 cents to $59.54 a barrel, while U.S. crude lost 40 cents to $51.09.
(Additional reporting by Swati Pandey; Editing by Sam Holmes & Shri Navaratnam)
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)