Despite hefty interest rate cuts by the U.S. Federal Reserve this week, investors were still worried about the health of the U.S. economy and the global ramifications of a slowdown.
Asian markets closed mixed Friday, ahead of the U.S. nonfarm payrolls report, with Japan lower but Australia jumping 3.4 percent.
Global stock markets were roiled by fears this week that a credit downgrade of big bond insurers would further harm the banking sector and stunt the global economy. Wall Street closed higher Thursday, but this couldn't salvage the Dow's worst January since 2000. It was the worst January since 1990 for the S&P 500 Index and the worst January ever for the Nasdaq, down 9.9 percent on the month.
The Nikkei 225 Average ended down 0.7 percent, dragged lower by worries about the U.S. economy ahead of key jobs data and a tumble in Sony shares to a 14-month low after the electronics giant lowered its profit forecast. Additional downward pressure came from Mizuho Financial Group and other banks after Mizuho reported a fall in quarterly profit and slashed its outlook for the second time, prompting HSBC to cut its rating to "neutral" from "overweight".