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Fears have been growing about the outlook for the U.S. economic recovery ahead of the key non-farm payrolls report, due at 1230 GMT, after a weaker-than-expected data this week on manufacturing activity and private sector hiring.
The FTSEurofirst 300 index of Europe's top companies was down 0.4 percent at 1176.26, a one-month low, after falling 1.1 percent in the previous session. It is still up about 4 percent so far this year, however.
"Expectations for today's payrolls have been scaled back," said Philip Tyson, a strategist at ICAP. "Investors are fearing another spring swoon, a setback in growth."
London's FTSE 100, Frankfurt's DAX and Paris's CAC-40 were trading between 0.2 and 0.6 percent lower.
An improving growth trend in the United States has been a key driver for investors taking on more risk this year, though any signs of weakness would also encourage hopes the Federal Reserve will sticks to its massive bond-buying programme.
The jobs numbers are expected to show employers added 200,000 jobs last month, below the 236,000 jobs created in February, leaving the unemployment rate steady at 7.7 percent, according to a Reuters poll of economists.
"Early calls for 200k jobs added now look optimistic, with whispers of a significantly lower number doing the rounds," said Matt Basi, head of UK sales trading at CMC Markets UK.
Reports of a new strain of bird flu in China and escalating tension in the Korean peninsula were also weighing on equity markets, having earlier sent MSCI's broad index of Asia-Pacific shares outside Japan down 1.1 percent to a three-month low.
In Europe, the STOXX 600 Travel and Leisure index fell 1.6 percent and was the worst-performing European sector, with airline stocks particularly hard hit over fears of the impact on travel to the Asian region.
BOJ shocks
The ramifications were still being felt from Thursday's radical overhaul of Japanese monetary policy by new central bank governor Haruhiko Kuroda, which will see $1.4 trillion injected into the economy to end decades of deflation.
Yields on Dutch, Belgian and Austrian bonds all fell to record lows, with market participants pointing to strong demand from Asia as investors switch out of Japanese government bonds.
"There've been stories of life companies switching out of JGBs overnight in search of yield, potentially into European bonds," said ICAP's Tyson.
The Dutch 10-year yield sank 4 basis points to 1.44 percent as investors opted for euro zone assets that carry higher yields than German Bunds but boast strong credit ratings. French 10-year bond yield sank 7 basis points to 1.81 percent, the lowest on record.
The preference for euro zone bonds offering a pick-up over Germany comes as German borrowing costs fell to eight-month lows on Thursday after the European Central Bank said it was ready to act to boost the region's economy.
The yen staged a small recovery against the dollar after falling a hefty 3.6 percent on Thursday, as investors and speculators began to book profits when it touched a 3-1/2 year low of 97.20 to the dollar.
The Japanese currency ultimately settled around 96.36 yen, unchanged on the day and leaving the dollar with gains of about 11 percent against the yen this year.
Against the euro, the yen was about 0.3 percent firmer at 124.20 following losses of 4.3 percent on Thursday, its biggest one-day fall against the single currency since November 2008.
Earlier the Nikkei share average jumped as much as 4.7 percent, extending Thursday's 2.2 percent rise and breaking through 13,000 points for the first time since August 2008. The 10-year JGB yield fell as much as 12 basis points to a record low of 0.315 percent.
Demand fears
In the oil market Brent crude was close to a five-month low around $106 per barrel on Friday as the bleaker U.S. data this week and signs of a surge in inventories dimmed the outlook for fuel demand.
Oil was set for its worst week of the year so far, with Brent down 3.4 percent, its biggest weekly fall since December, and U.S. crude down 4.3 percent, its sharpest drop since September.
Copper was also weak and not far from eight-month lows on the London Metal Exchange, where it traded around $7,425 a tonne.
"Commodity markets are telling us the real story, and that is there is simply no demand out there," said Jonathan Barratt, chief executive of commodity research firm Barratt's Bulletin.
