A report saying the incoming US leader's economics team was considering slowly hiking tariffs on imports provided support to traders and put a cap on the dollar's latest surge, while news of fresh curbs on AI chips to China appeared to have little immediate impact.

The equity sell-off tracked hefty losses on Wall Street, where all three main indexes finished more than one percent lower as the new trading year continued to falter.

Markets have started the year cautiously, with the optimism that characterised most of the past three months dented by concerns about Donald Trump's coming presidency and the US central bank's hawkish pivot on monetary policy.

A report saying the president-elect was considering declaring a national economic emergency to provide legal cover to impose tariffs on all imported goods added to the sense of uncertainty on trading floors.

With inflation worries already elevated owing to Donald Trump's pledges to slash taxes, regulations and immigration when he returns to the White House, the latest readings added to uncertainty on trading floors.

Eyes were also on the release of closely watched US jobs data at the end of the week after the Federal Reserve scaled back its interest rate cut expectations and took a more hawkish turn.

Concerns about China's stuttering economy, the outlook for US interest rates and the wars in Ukraine and the Middle East were also causing a sense of uncertainty.

Hong Kong, Sydney and Taipei climbed, while Seoul surged nearly two percent higher despite deepening political uncertainty in Asia's fourth-largest economy.

Equities mostly had a bumper 2024 on the back of enthusiasm about artificial intelligence (AI), cuts in borrowing costs by central banks, and Donald Trump's presidential election win.

Overnight, European stocks bounced around while US equities shook off early weakness to push higher as investors waited to see if a so-called Santa Claus rally would materialise.

A holiday-thinned week got off to a healthy start after last week's sell-off sparked by the US central bank's outlook that suggested officials will not lower borrowing costs as much as previously hoped over the next 12 months.

Data showing Japanese inflation rose more than expected last month did little to help the yen, which took a hefty hit from the US central bank's more hawkish tilt and the Bank of Japan's refusal to tighten monetary policy.

Asian markets sank Thursday and the dollar held gains following a severe sell-off on Wall Street that came after the Federal Reserve halved its rates outlook and boss Jerome Powell warned officials' focus was back on fighting inflation.

There were few catalysts to drive region-wide activity before the US central bank's interest rate decision, with Wall Street providing a negative lead as profit-takers moved in while economic data was mixed.

Investors are keeping tabs on Beijing after Chinese leaders' latest measures to kickstart the economy fell short of expectations, with weak retail sales data Monday reinforcing the need for more support.

According to a new survey, Americans' expectations for Donald Trump's second term are as follows: 60% of respondents favor increased military presence on the border, while 51% predict economic progress.

The tepid start came on the year's last full week of trading, with the focus on key monetary policy decisions by the US Federal Reserve and the Bank of Japan.

Hong Kong and Shanghai both tumbled as investors shrugged at Beijing's pledge to introduce measures aimed at "lifting consumption vigorously" as part of a drive to reignite growth in the world's number two economy.

Seoul's Kospi pushed higher for a third straight day, eating further into the losses sustained in a sell-off that came in the wake of South Korean President Yoon Suk Yeol's short-lived martial law declaration.

There is speculation that monetary policymakers will not make as many reductions next year as previously expected amid fears that Trump's planned tax cuts, deregulation and tariff hikes will reignite inflation.

The retreat came on a tough day for Asian markets despite another record on Wall Street, though Hong Kong bounced in the afternoon after China said it would adopt a looser approach to monetary policy.

Traders were looking for a little stability after the past few days that saw Seoul plunged into crisis, France's government fall and bitcoin surge to a historic high above $100,000.

The gains, which followed another record day on Wall Street, came as traders were also left assessing Washington's decision to impose fresh tech export restrictions on Beijing in the latest volley in a long-running standoff between the rival powers.

Traders began the month on the front foot after a rollercoaster ride since Donald Trump's re-election and warning that he will hit China, Canada and Mexico with hefty tariffs.

With Wall Street closed for the Thanksgiving break, there were few catalysts to drive business heading into the weekend and at the end of a rollercoaster month dominated by uncertainty in the wake of Donald Trump's election victory.

With the United States heading into the Thanksgiving holiday, business in New York was subdued after a flurry of activity since Donald Trump's election win at the start of the month.

Rising geopolitical tensions tempered the atmosphere and lifted oil again after Russia hit Ukraine with a new-generation intermediate-range missile and sent a warning to the West.

Investors are treading carefully this week amid uncertainty after Trump's re-election and as he picks his cabinet, with several China hawks up for key positions fanning worries of another trade war between the economic superpowers.

Equities have seen big swings since Trump's election at the start of the month, with optimism over pledged tax cuts and deregulation offset by worries they could also reignite inflation, along with threatened import tariffs.

A warning from US central bank boss Jerome Powell that reductions in borrowing costs were not preset dented optimism last week, while traders were also keeping tabs on the president-elect's cabinet choices, with several China hawks lined up.