Asian stock investors joined a global retreat from riskier assets on Friday and the dollar wavered on growing doubts about US President Donald Trump's ability to fulfill his economic agenda.

Confidence was shaken further after a van mowed through crowds of tourists in Barcelona on Thursday, killing at least 13 people and injuring more than 100 in an attack authorities were treating as terrorism. The Spanish police said they had killed four attackers in a shootout south of the city overnight.

The dollar was indecisive, falling against the safe haven Yen but rising against the Euro, with the common currency hit by meeting records from the European Central Bank that showed caution about removing monetary stimulus too soon.

MSCI's broadest index of Asia–Pacific shares outside Japan dropped 0.5 per cent in early trade, but still looked set to gain 1.4 per cent for the week after tensions between North Korea and the United States came off the boil.

Japan's Nikkei slid 1.2 per cent as the Yen rose, and looked set to lose 1.3 per cent for the week.

Overnight, Wall Street's major indexes slumped between 1.2 per cent and 1.9 per cent. The S&P 500 index posted its biggest drop in three months.

“Sentiment in financial markets is fluid, where earlier in the week a certain positivity was building seemingly in favour of the bulls camp. We can now see a reversal in fortunes and sentiment deteriorating,” Chris Weston, Chief Market Strategist at IG in Melbourne, wrote in a note.

Concerns have grown over Trump's ability to push through his economic goals such as tax cuts and infrastructure spending following the exodus of executives from two prominent business councils in reaction to his response to clashes last weekend in Charlottesville, Virginia.

Trump on Thursday again decried the removal of pro-slavery Civil War Confederacy monuments—which have fueled US racial tensions—stoking worries that some of his key policy staffers and aides may quit. Chief among them were rumours that Gary Cohn, director of the National Economic Council, would resign, following Trump's defense of white nationalist protesters in Charlottesville.

A statement from the White House that Cohn intends to remain in his position calmed markets only briefly before selling resumed.

The dollar remained subdued on Friday against the Yen, posting its third session of losses against the yen. It fell 0.2 per cent to 109.34 yen, adding to Thursday's 0.6 per cent slide.

The Dollar Index—which tracks the greenback against a basket of six major peers—however, rose 0.1 per cent to 93.739.

But that was driven largely by weakness in the Euro, the biggest component of the basket, after minutes of the ECB's July meeting showed policymakers were worried about a possible overshoot in the common currency.

A recent bounce in the Euro, which is making the bloc's exports less attractive and imports cheaper, has been singled out by investors as the biggest threat to the ECB's efforts to revive inflation in the euro zone.

The euro was marginally lower on Friday at $1.1717, extending the previous session's 0.4 per cent drop.

In commodities, oil prices pulled back following recent gains.

Global benchmark Brent pulled back 0.4 per cent to $50.85 a barrel on Friday, after jumping 1.5 per cent on Thursday on a drop in US inventories. It is on track for a 2.4 per cent decline for the week.

US crude fell 0.3 per cent to $46.95 on Friday, surrendering some of Thursday's 0.7 per cent gain, heading for a 3.8 per cent weekly loss.

Spot gold was steady on Friday at $1,287.31 an ounce, holding Thursday's 0.4 per cent gain. It is set to end the week down 0.1 per cent.

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