By Hideyuki Sano
MSCI's broadest index of Asia-Pacific shares outside Japan dropped as much as 0.35 percent at one point to touch its lowest since early December.
Hong Kong's Hang Seng hit six-month lows, having lost 3.9 percent so far this week. South Korea's KOSPI hit nine-month lows and in mainland China, the CSI300 index lost almost 5 percent this week to hit one-year lows.
Japan's Nikkei lost 0.85 percent.
On Wall Street, the Dow Jones Industrial Average fell for an eighth straight session on Thursday and the S&P 500 lost 0.63 percent, with industrials and materials shares hit hard.
Even the high-flying Nasdaq Composite, which has outperformed this year on the perception that high-tech shares were less vulnerable to trade wars, shed 0.88 percent.
In a sign that escalating tensions between the United States and its trade partners were taking a toll on the economy, the Philadelphia Federal Reserve's gauge of U.S. Mid-Atlantic business activity published on Thursday fell to a 1-1/2 year low.
"The Philadelphia Fed's survey showed a drop in new orders. Investors are concerned that the trade frictions are starting to affect corporate sentiment and their activities," said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.
The impact on corporate profits has become tangible, with German carmaker Daimler cutting its earnings forecast on Wednesday, saying tariffs on cars exported from the United States to China would hurt Mercedes-Benz sales.
Despite budding signs of economic damage, trade frictions have shown no sign of abating.
U.S. Commerce Secretary Wilbur Ross said on Thursday the United States needs to make it harder for its trading partners to have high trade barriers in order to achieve President Donald Trump's ultimate goal of lower tariffs and a level playing field.
India joined the European Union and China in retaliating against Trump's tariffs on steel and aluminium, raising import duties on U.S. almonds by 20 percent and leveraging its position as the world's biggest buyer of the product.
While some investors still hope Washington and Beijing can work out a deal before July 6, when the first round of U.S. tariffs on Chinese goods as well as retaliatory tariffs by China are due to take effect, others see diminishing hopes of an early compromise.
Worsening sentiment pushed U.S. bond yields lower and triggered profit-taking in the dollar.
The 10-year U.S. Treasuries yield fell to 2.910 percent from Thursday's high of 2.950 percent and its three-week high of 3.010 percent touched on Wednesday last week.
As the dollar lost steam, the euro bounced back to $1.1611 after hitting an 11-month low of $1.1508 on Thursday.
The single currency had fallen on bets of a protracted period of monetary policy divergence between the U.S. Federal Reserve and the European Central Bank.
In addition, the Italian government's appointment on Thursday of two eurosceptics to head key finance committees reignited worries about anti-euro voices in the euro zone's third-largest economy.
The British pound jumped back from a seven-month trough after the Bank of England's chief economist, Andy Haldane, unexpectedly joined the minority of policymakers calling for rates to rise to 0.75 percent, citing concerns about growing wage pressure.
The pound last fetched $1.3262, off Thursday's low of $1.3102.
The dollar changed hands at 109.95 yen, having slipped 0.65 percent so far this week.
The Chinese yuan weakened about 0.15 percent in both onshore and offshore trades, staying near their lowest levels since mid-January.
"If the U.S. puts more pressure on China with tariffs, I would suspect the Chinese authorities would like to drive the yuan lower to mitigate the impact," said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.
The MSCI emerging markets index fell to its lowest in almost nine months this week as it was also hurt by rising U.S. interest rates, which could prompt fund outflows and also raise funding costs for many borrowers in those countries.
Some emerging market countries have recently raised interest rates to stem declines in their currencies..
Oil prices rose on uncertainty ahead of a meeting of the Organization of Petroleum Exporting Countries (OPEC) and other major producers including Russia starting later on Friday.
Saudi Arabia and Russia have said a production increase of about 1 million barrels per day (bpd) or around 1 percent of global supply had become a near-consensus proposal for the group and its allies, but Iran held out against a deal amid the prospect of lower exports due to U.S. sanctions on Tehran.
Brent crude traded at $74.00 a barrel, up 95 cents, or 1.3 percent, a day after it had fallen $1.69.
U.S. West Texas Intermediate crude rose 89 cents, or 1.35 percent to $66.42 per barrel.
(Editing by Eric Meijer and Jacqueline Wong)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)