Asian shares got off to a rocky start on Friday after a sharp drop on Wall Street curbed enthusiasm for the dollar even after it touched multi-year highs in the previous session.
US stocks ended sharply lower, as Apple Inc broke under key technical levels after the tech giant withdrew an update to its new operating system. That pushed the S&P 500 to its biggest one-day decline since July.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3% in early trade, poised for a weekly loss over 2%.
Japan's Nikkei stock average skidded 1.6%, on track to shed more than 1% for the week, as a stronger yen exacerbated the risk-averse mood.
Data released before the market opened showed Japan's annual core consumer inflation eased in August, in another sign that the Bank of Japan could be forced into additional easing steps to meet its 2% price goal sometime next fiscal year.
The dollar index, which tracks the greenback against a basket of major currencies, edged down about 0.1% to 85.115, after it rose to a four-year high of 85.485 on Thursday. The dollar is on track for its 11th successive weekly rise, something it has not achieved in four decades.
"The dollar index strengthened to a new post-2010 high, although it gave back some of its gains amid a tech-driven sell-off in US equities," strategists at Barclays wrote in a note to clients.
The yield difference between 10-year US Treasuries and German Bunds widened the most in nearly 15 years on Thursday, putting pressure on the euro.
The European unit edged up about 0.1% to $1.2759, after falling as low as $1.26955 on trading platform EBS on Thursday, its lowest since November 2012.
The dollar was about 0.2% lower on the day against its Japanese counterpart at 108.56 yen, pulling away from last week's six-year peak of 109.46.
Oil edged higher after the strong dollar weighed on it overnight, with Brent slightly higher at $97.01 a barrel.
Spot gold was steady on the day at $1,223.90 an ounce, after rebounding off Thursday's session low of $1,206.85 an ounce, its weakest since Jan. 2.
