Emerging market shares and currencies have slumped as investors feared higher US interest rates under incoming President Donald Trump will spark capital outflows, while European bond yields were on course for their biggest weekly rise in a year.
Developed market equities held their ground on Friday. Europe's index of 300 leading shares was unchanged on the day, putting it on course for its best week since July, and Japan's Nikkei rose slightly, even in the face of a stronger yen.
US futures pointed to a slightly lower open on Wall Street, as investors prepared to take some chips off the table after the Dow Jones hit a record high on Thursday.
The Dow remains well on track for its best week in five years.
The most volatile trading on Friday was across emerging markets, as investors bet that Trump's fiscal policies will be inflationary, push US rates up and drive investors into dollar-based assets.
This prompted the central banks of Malaysia and Indonesia to intervene in the foreign exchange market to try to stem the outflow of money.
"The reflation trade started to shake those most sensitive to higher yields," said Jim Reid, a market strategist at Deutsche Bank.
"EM (emerging markets) is clearly also impacted by the anti-globalisation side of the Trump victory. Indeed the moves over the last two days have been pretty eye watering," he said.
MSCI's emerging market index fell 2.3 per cent to its lowest level since July, chalking up its third consecutive weekly decline, while MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.6 per cent.
Japan's Nikkei bucked the trend, closing 0.2 per cent higher after earlier hitting a 6-1/2-month high.
Europe's FTSEurofirst 300 was up 0.1 per cent and Germany's DAX was up 0.4 per cent, while Britain's FTSE 100 bore the brunt of a rise in sterling above $US1.26 and fell 0.6 per cent.
Among the biggest fallers in Asia were Indonesian shares, which slumped three per cent while the rupiah currency fell more than 2.5 per cent to 4-1/2-month lows before it stabilised on the Indonesian central bank's intervention.
The Malaysian ringgit also dropped one per cent to 9-1/2-month lows, and Mexico's peso fell 1.5 per cent to a new record low of 20.84 a dollar.
Elsewhere in currencies, the US dollar edged down from near three-and-a-half month high against the yen to 106.50 yen, and the euro was steady at $US1.0880.
Still, the dollar is having its best week in a year, up 1.7 per cent against a basket of currencies, lifted by the rise in US yields and expectations of tighter policy from the Federal Reserve in 2017 and beyond.
US bond markets are closed for Veteran's Day on Friday. But already this week the 10-year Treasury yield has hit its highest levels in 10 months at 2.15 per cent, and the 30-year yield a 10-month high of 2.96 per cent.
The 30-year yield rose 38 basis points this week, its biggest weekly jump since 2009. Markets are betting Trump's policy stance - from protectionism and fiscal expansion - will boost inflation.
Inflation expectations measured by US inflation-linked bonds rose to 1.87 per cent, its highest since July 2015, up from low below 1.2 per cent touched in February.
In a remarkable shift of sentiment, the market is also now starting to price in a chance of a rate hike by the European Central Bank for the first time since 2011.
Debt yields are rising in Europe as well, with 10-year German Bunds yield hitting a nine-month high of 0.345 percent .
Elsewhere, oil prices eased as the market looked to whether OPEC will decide later in November to cut production to address long-running over supply concerns.
US crude futures fell 0.6 per cent to $US44.37 a barrel and Brent fell 0.3 per cent to $US45.70.
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