The Nikkei slumped to its lowest close for nearly three months yesterday, leading an Asia-wide sell-off sparked by President Donald Trump's apocalyptic warning over North Korea's weapons programme.
North Korea responded with a statement by its official KCNA news agency claiming Trump is "driving" the Korean peninsula to the "brink of a nuclear war".
Toyota shares tumbled 1.57 percent to 6,236 yen and Nintendo was off 1.83 percent to end the session at 37,490 yen.
South Korea's KOSPI fell 1.7 per cent on Friday to its lowest since May 24, but its losses for the week were a relatively modest 3.2 per cent.
Gold prices have maintained a firm tone with a push to 2-month highs on Thursday as underlying demand for defensive assets remained an important feature.
The index was also dragged lower after Beijing ordered probes into three major Chinese social networking platforms over outlawed content.More news: August 11 Reminds Pennsylvania Residents To Dial 8-1-1 Before Digging
With Japanese markets closed for a public holiday, Hong Kong led the downward charge in Asia-Pacific as the Hang Seng lost more than two percent.
So far it's just been a war of words between the US and North Korea so the rally has just been a normal reaction to the possibility of a geopolitical event. The next key data on focus will be tomorrow's CPI figures which should shed more light on the path of the USA inflation.
"After today's data and commentary from Dudley, if we see even a near-miss on CPI tomorrow, I think the dollar has got quite a bit of room to sell off", Sweeting said.
Against the pound, the euro managed to gain margially, rising 0.06% to 0.9047. Prices for bonds and gold headed higher.
The dollar index .DXY , which measures against a basket of currencies, fell 0.05 percent.
Disappointing earnings also helped pull the market lower Wednesday.
"Amid all the sabre-rattling, we expect gold prices to continue to move higher and likely cross the $1,300 an ounce mark in relative short order", said INTL FCStone analyst Edward Meir.
Benchmark US 10-year notes last rose 6/32 in price to yield 2.1905 per cent, from 2.211 per cent late on Thursday.
Oil futures prices rose Wednesday after USA government data showed a fall in crude-oil inventories.