Asian shares and the euro fell on Friday as debt restructuring talks between Greece and its creditors dragged on, undermining sentiment, and investors sat tight ahead of US jobs data that will offer more clues on the health of the world's top economy.
Financial spreadbetters expected Britain's FTSE 100, Germany's DAX and France's CAC-40 to open flat.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.4%, off a five-month high hit on Thursday, but looked set to record a fifth successive weekly gain. Japan's Nikkei average fell 0.4%.
Australian shares lost steam on weak commodity prices, although news that commodities trader Glencore and miner Xstrata are in talks on a $80 billion merger stirred interest.
"It does seem like there is a little bit of positioning ahead of tonight, it will be a big night for US data and it will be a big influence on risk assets, the US dollar as well," said Stan Shamu, market strategist IG Markets.
New US claims for unemployment benefits fell last week, pointing to a better jobs market, and markets are now focused on non-farm payrolls data due at 1330 GMT (1900 IST) for gauging the sustainability of the economic recovery.
US employers are expected to have added 150,000 jobs in January, compared with 200,000 the month before.
Shinichiro Kadota, a strategist at Barclays Capital in Tokyo, said since December numbers reflected a temporary rise in part-time jobs during the holiday season, and a drop in January back to around 150,000 jobs would still suggest moderate recovery in the labour market.
The dollar at 76.18 yen stood near a record low around 75.31 yen set on Oct 31, when Japan intervened. The dollar inched up 0.1% against the euro at $1.3140.
Spot gold fell 0.2% to around $1,756 an ounce while London copper sagged on caution and sluggish Chinese demand, heading for its first weekly loss in the past month.
The latest economic data from China, which showed the official Purchasing Managers Index for non-manufacturing sectors dipping to 52.9 in January from 56.0 in December, provided a further case for policy easing to support growth.
"The current global economic environment is neither good nor bad, which tends to strengthen selective risk-taking within a generally limited risk capacity," said Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory Co.
Easy Policy
Federal Reserve Chairman Ben Bernanke said on Thursday he was seeing signs that some of the factors dampening US business investment, including uncertainty surrounding European bank woes, might be waning. But he kept the option of further easing on the table.
Greece has kept hopes of a debt deal alive all this week but has pushed back the actual debt swap agreement needed to secure a crucial second batch of funds to prevent Athens from defaulting.
Euro zone finance ministers aim to agree a second financing package for Greece on Monday. A deal for Greece would include agreement on official new financing, the size of voluntary losses banks and other private bondholders are willing to accept and new reforms Athens must undertake.
Despite a lack of progress in the debt restructuring talks, sentiment continued to improve in European debt markets, as the effect of the European Central Bank's unprecedented funding provisions in December filters through.
Spain and France drew healthy demand for their debt sales on Thursday, driving their funding costs lower.
Japanese government bond yields for 5-year and 20-year maturities hit their lowest in 10 weeks on Friday, supported by an accommodative global monetary stance including the Fed, which have also supported Treasuries.
Asian credit markets steadied, with spreads on the iTraxx Asia ex-Japan investment grade index nearly flat.
Brent prices remained better bid than US crude.