A report saying the president-elect was considering declaring a national economic emergency to provide legal cover to impose tariffs on all imported goods added to the sense of uncertainty on trading floors.

Sentiment was also clouded by data showing that Chinese consumer inflation remained almost non-existent despite a raft of stimulus measures in the final three months of last year.

And the pound weakened to lows not seen for more than a year on worries about the UK economy.

Equities have had an unremarkable start to 2025 after the Federal Reserve in December made a hawkish pivot and indicated it would not cut rates as much as initially expected over the next 12 months owing to sticky inflation and a still-strong labour market.

Worries about Trump's plans to slash taxes, regulate immigration and ramp up tariffs have also led to warnings that prices could reignite.

That has sent the yield on the 10-year US Treasury note surging and fanned speculation it could top five percent for the first time since October 2023.

Friday's US employment figures are now well in focus for trade, with markets in New York closed Thursday to mourn former US president Jimmy Carter.

Forecast-topping data on job openings and prices paid by services firms compounded traders' concerns, while analysts said there was unease among investors about Trump's unpredictable governing style, particularly with him not having to face another presidential election.

After fluctuating through the day, the Dow and S&P 500 ended slightly higher on Wall Street, but the Nasdaq dipped.

Hong Kong and Shanghai fell after data showed Chinese inflation eased in December, likely piling pressure on officials to ramp up stimulus to boost consumption.

Leaders have unveiled a range of measures to kickstart the world's number two economy, with a focus on getting people to spend, and support for the troubled property sector.

"Given the various high-level meetings and policy communiques over the past month, it appears a safe bet to expect more aggressive fiscal policy support from China in 2025, as well as continued monetary policy easing," said Lynn Song, chief economist for Greater China at ING.

"There is the obvious and extensively discussed angle of a less favourable external environment with a high likelihood of additional tariffs and sanctions from the US once President Trump enters office.

"Another less discussed element is that there appears to be a greater consensus building domestically on the need for stronger policy support to shake the economy from its extended period of heightened pessimism."

There were also losses in Tokyo, Sydney, Wellington, Taipei, Mumbai and Bangkok, though Seoul, Manila and Jakarta eked out small gains.

London slipped at the open and the pound sat at its lowest levels since November 2023 on worries about Britain's fiscal position and elevated inflation. The drop in sterling comes even as UK 10-year bond yields surge.

The dollar also extended gains against the euro.

Paris and Frankfurt were also both down.

- Key figures around 0810 GMT -

Tokyo - Nikkei 225: DOWN 0.9 percent at 39,605.09 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 19,240.89 (close)

Shanghai - Composite: DOWN 0.6 percent at 3,211.39 (close)

London - FTSE 100: DOWN 0.1 percent at 8,244.29

Euro/dollar: DOWN at $1.0295 from $1.0316 on Wednesday

Pound/dollar: DOWN at $1.2269 from $1.2361

Dollar/yen: DOWN at 158.18 yen from 158.38 yen

Euro/pound: UP at 83.93 pence from 83.44 pence

West Texas Intermediate: DOWN 0.1 percent at $73.24 per barrel

Brent North Sea Crude: DOWN 0.1 percent at $76.07 per barrel

New York - Dow: UP 0.3 percent at 42,635.20 (close)

dan/fox

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