By Chong Koh Ping and Avantika Chilkoti
International stocks wavered, as investors braced for President Trump's response to China's push for tighter security controls on Hong Kong.
By Friday afternoon in Hong Kong, the benchmark Hang Seng Index had declined 0.8%. The Shanghai Composite was up 0.2%.
European stocks started the day lower with the benchmark Stoxx Europe 600 down 0.8%. S&P 500 stock futures lost 0.3%.
Japan's Nikkei 225 closed 0.2% lower, while Australia's S&P/ASX 200 retreated 1.6%.
Colin Low, senior macro analyst at FSMOne.com in Singapore, said optimism over the reopening of economies could be overriding concerns over heightened U.S.-China tensions, helping markets pare earlier losses.
U.S. stock indexes closed lower Thursday after President Trump said he would hold a press conference about China on Friday, with the three major gauges falling between 0.2% and 0.6%.
"Markets will be watching what Trump will do or say in his press conference later today," Mr. Low said.
Any U.S. measures on trade or against Chinese companies, and any Chinese retaliation, could have a greater impact than previous actions taken before the new coronavirus battered both economies, he added.
On Thursday, China's legislature approved a resolution to impose national-security laws on Hong Kong. That sets the country on a collision course with the U.S., which has accused Beijing of reneging on its pledge to respect the city's self-governance.
Weakness in the Chinese yuan has reflected heightened tensions between the world's two largest economies. A weaker yuan could help China's economy by making its exports more competitive, but risks provoking U.S. criticism that Beijing is manipulating its currency.
The People's Bank of China set a daily midpoint for trading of the onshore yuan at 7.1316 to the dollar, fixing this level at a fresh 12-year low for the third time this week.
By afternoon in Hong Kong, the less tightly controlled offshore yuan strengthened slightly to 7.1659 to the dollar, while the onshore yuan stood at 7.1478. Earlier this week, the offshore yuan, which first started trading in 2010, came close to the all-time weak levels that it hit in September.
The yield on the benchmark 10-year U.S. Treasury note fell to 0.664%, from 0.703%. Bond yields fall as prices rise.
Brent crude, the global gauge of crude-oil prices, fell 1.4% to $35.52 a barrel.
Write to Chong Koh Ping at firstname.lastname@example.org and Avantika Chilkoti at Avantika.Chilkoti@wsj.com