The euro rose briefly early on Friday on talk of a G20 emergency statement to address the euro zone crisis, but the prospect of a global recession kept Asian stocks firmly on track for their worst weekly drop since November 2008.
Alarm about the risk of another economic downturn, after the U.S. Federal Reserve's dire forecast at its two-day policy meeting which finished on Wednesday, pushed world stocks to 13-month lows as investors shed risky assets from portfolios and scurried to safer havens.
The surging dollar and yen, and consequent sharp moves lower in major European and U.S. stock indices overnight, sparked talk of governments stepping in to soothe nerves. Japanese news service Jiji reported on Friday that the G20 was preparing an emergency statement to confirm cooperation on the euro zone debt crisis.
That news helped the beleaguered euro which has slid to a 10 year low against the yen earlier. It climbed 0.7 percent on the day to $1.3561 against the dollar.
S&P 500 futures stabilized and were trading up 0.7 percent, though Asian stock markets looked set to extend their weakness with South Korea's KOSPI <.KS11> off 3.3 percent in early trading.
The South Korean won briefly strengthened against the dollar as dealers suspected heavy dollar-selling by the authorities following a verbal warning from the government and the central bank.
South Korea became the latest emerging economy to pledge action to stem its falling currency on Friday after Brazil moved to protect its currency from a sharp slide, in what appeared to be a sudden shift in strategy.
With Japanese markets shut on Friday for a public holiday, traders said investors looking to raise cash might do so by selling shares in Hong Kong, putting further pressure on the Hang Seng <.HSI> which has already lost 8 percent this week and is at a 26-month low.
The MSCI Asia ex-Japan index <.MIAPJ0000PUS> was down 1.1 percent in early trade. Indonesian stocks, the region's best performing stock index this year, plunged almost 9 percent as investors bailed.
Commodity markets, copper in particular, bore the brunt of the global rout that accompanied the Fed's gloomy outlook with Brent crude oil futures posting their biggest single-day loss in six weeks.
Copper sank 7.5 percent while the CRB commodity index <.CRB> lost 4.4 percent.
Gold lost its sheen as a safe haven as U.S. gold futures posted their biggest sell-off in a month while silver crashed nearly 10 percent lower.
(Reporting by Vikram Subhedar; Editing by Daniel Magnowski)