MSCI's benchmark emerging equities index rose 0.3 percent in a fourth straight day of gains, but failed to match Monday's stellar 1.2 percent rise as investors awaited a crucial US consumer inflation print.
Inan Demir, senior emerging economist at Nomura International, said Friday's US payrolls data had been strongly supportive of risk sentiment, thanks to its "Goldilocks" nature, showing rising employment but muted wage growth.
"But now we have another test of that Goldilocks scenario coming up later today. And I think it's only natural for the emerging markets to pause for breath as well," he said.
A higher-than-expected inflation print could encourage the US Federal Reserve to raise interest rates more quickly than expected. Higher US rates reduce the attractiveness of riskier asset classes.
The Turkish lira fell 0.7 percent against the dollar to its lowest since mid-December after parliament passed a controversial law revamping electoral regulations.
The opposition said the law could open the door to fraud and jeopardise the fairness of 2019 polls. After the voting result was announced a brawl ensued.
Demir said the law's passage may have contributed to the negative sentiment around Turkey following the Moody's ratings downgrade last week and the very weak current account numbers on Monday. Turkey also remains one of the most vulnerable emerging markets to Fed rate rises.
Turkish five-year credit default swaps also widened 2 basis points (bps) from Monday's close to 171 bps. Turkey's 10-year local government bond yield rose to 12.75 percent, its highest since November 2017.
Regulatory changes also weighed on Chinese stocks, with mainland shares closing down 0.85 percent, snapping a three-day winning streak.
China is merging its banking and insurance regulators, giving new powers to the central bank and creating new ministries in the biggest government shake-up in years. It will also form a new competition regulator to improve oversight of M&A and price-fixing.
South African assets were also on the backfoot after a court blocked state power utility Eskom from signing $4.7 billion of renewable energy deals. The energy minister said last week that delays in signing the projects over the years had affected investor confidence.
Five-year credit default swaps for Eskom were up 1 bp from Monday's close to 343 bps, according to IHS Markit data, its highest level since Feb. 21.
South African stocks fell 0.3 percent but the rand eked out gains of 0.2 percent.
Russia's rouble slipped 0.13 percent after British Prime Minister Theresa May said it was highly likely Moscow was behind the poisoning of a Russian former double agent in England using a military grade nerve agent.
On the positive side, Indian bank shares jumped 2.4 percent to one-week highs after a report said Punjab National Bank (PNB) would compensate lenders who have lost money in an alleged fraud.
Bank of India also leapt 8 percent on news it had recovered over $1 billion from what had earlier been categorized as bad loans.