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Japan's Nikkei share average fell 1.7% and entered bear market territory on Friday, having plunged 20% from a 5-1/2 year high hit last month.
The Nikkei slid to 12,691.33 on Friday morning after the yen firmed against the dollar on concerns that the key US jobs report will disappoint.
The broader Topix .TOPX index lost 1.6% to 1,053.34.
Asian shares stabilised from six-month lows on Friday, helped by overnight Wall Street gains, but investors remained wary ahead of the key US jobs report due later that may clarify whether the Federal Reserve could start tapering its stimulus programme in coming weeks.
US stocks rose on Thursday but the dollar slid against the euro and yen. Worries the nonfarm payrolls will disappoint prompted investors to cut heavy bets that had been profitable for months, particularly bets that the US currency will rise on a strengthening economy against the yen and Japanese stocks.
Economists expect 170,000 jobs to have been added to the US economy in May and the unemployment rate to hold at an almost 4-1/2-year low of 7.5%.
MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.1% after falling to its lowest since late November on Thursday.
Australian shares were steady after hitting a fresh 4-1/2-month low on Thursday while South Korean shares opened down 0.3%.
The dollar was up 0.4% against the yen at 97.31, after plummeting over 3 % overnight to a seven-week low of 95.90 yen. The dollar index, measured against a basket of six major currencies, steadied after hitting its lowest since February 25 of 81.077 on Thursday.
"The recent mixed US data flow and general risk-off environment have not benefited the US dollar. However, we maintain our bullish dollar view for the remainder of the year," said Sebastien Galy, foreign exchange strategist at Societe Generale in New York, in a note to clients.
"As the Fed starts to retreat gradually from its ultra-loose policy, we expect the BOJ, the ECB and possibly the BOE (Bank of England) to step forward and ease further. As monetary policy differences sharpen, so will cross-currency performances."
Market volatility reflects a retracement from excessive fears about the reduced Fed stimulus and high expectations for Japan to end deflation and boost growth, analysts said.
The recent pull-back in global financial markets was sparked more than two weeks ago when Fed Chairman Ben Bernanke suggested the US central bank could start paring massive bond purchases as soon as the Fed's next few meetings if the economy improves further.
Corrections have been far deeper for Japanese stocks and the yen as the Nikkei had surged over 80% from mid-November to a 5-1/2-year high last month while the yen had slumped 30% against the dollar in the same period, when speculators boosted their bets that Prime Minister Shinzo Abe will pursue strong reflationary policies. The Bank of Japan's unprecedented stimulus unveiled in early April had strengthened such bets.
The turmoil accelerated and crushed Japanese stocks as "Abenomics" failed to live up to blown-out market expectations for bold growth-spurring steps, triggering a wave of yen selling and Nikkei buying, all weighing on broader Asian bourses.
Some analysts pointed to markets responding too negatively to the impact from potential Fed tapering.
Credit Suisse said in a research note that three key differences from stock corrections in past cases of Fed stimulus reduction suggested investors may be too pessimistic this time.
In previous cases, stock valuations were high, European risks were heightening and US recovery was poor. Now, stock valuations are lower, European risks are lessening and the US economy is improving. "We continue to suggest investors buy markets closer to trough valuations," it said.
The dollar steadied against the euro at $1.3240 early on Friday after the common currency spiked to a three-and-a-half-month high of $1.3306 on Thursday, drawing support from the European Central Bank's decision to leave interest rates unchanged and as ECB President Mario Draghi said further monetary support was unlikely in the near future.
Draghi said the ECB was technically ready for negative deposit rates - the rate it pays commercial banks to hold their money - but there was no reason to act right now.
US crude futures steadied at $94.73 a barrel.
