Investors sought refuge in traditional safe havens like the Japanese yen and gold after Trump said late Thursday that he had instructed US trade officials to consider $100 billion in additional tariffs on China.
The latest news comes as investors had hoped an all-out trade between the two world economic superpowers can be averted after conciliatory signals from Washington. Most emerging assets gained in the previous session.
The dollar index was slightly lower in Asia trading.
OCBC analysts said in a note to clients that the "ratcheting up in trade rhetoric" wasn't a good sign for risk appetite.
"Asian bourses may tread cautiously today, with investors still finely tuned to the twists and turns in the US-China trade tensions, ahead of the key US nonfarm and unemployment report."
While broader Asian stocks, excluding their Japanese counterparts, posted minor gains, Korea's benchmark equity index Kospi slipped 0.6 percent. Most South Asian equity markets saw lacklustre trading.
The Korean won, sensitive to its local equity market performance, weakened the most in the region with a 0.7 percent decline.
On the week, it was set to fall 0.4 percent.
However, a recent Asia forex positioning poll conducted by Reuters saw bullish sentiment for the won at its strongest since the beginning of the year and among its peers.
The won owes much of the improved sentiment to a renegotiated trade deal between the South Korea the United States called KORUS. The won continues to be on the US currency monitoring list.
The Singapore dollar and the Indonesian rupiah slipped about 0.1 percent each. Both currencies are headed for weekly losses.
The Philippine peso, however, bucked the trend and was set for a 0.1 percent gain this week.
Chinese, Taiwanese and Thai financial markets were closed for holidays.
RINGGIT
The Malaysian ringgit was subdued, with investors keeping a close watch on political developments.
As expected earlier in the session, Prime Minister Najib Razak announced the dissolution of parliament on Friday over two months before the end of his term, making way for a general election.
INDIAN RUPEE The Indian rupee was slightly weaker, with losses capped by unexpected downward revision of inflation forecasts by the Reserve Bank of India in its policy meeting on Thursday, when it held rates steady.
The lowering of inflation forecast to a range of 4.7-5.1 percent from 5.1-5.6 percent has raised hopes that the RBI will hold policy for the rest of the year.
A Reuters positioning poll showed improved sentiment for the rupee in the past two weeks, with bearish bets on the currency reversing.