The Korean won also continued to skid, down 0.45 percent to 1,147.2, falling below its 200-day moving average for the first time in a month.
The S&P 500 index had its biggest one-day drop in nearly three months on Thursday as investors fled riskier assets, with technology stocks leading the charge, in response to an increasingly aggressive exchange of threats between the United States and North Korea.
While European stocks have seen robust inflows in the wake of the French elections, their performance have lagged their USA rivals since mid June.
Materials, a sector that includes gold producers and other resource-based companies, was the lone gainer among the index's 10 main sectors, rising 0.7 per cent.
On Thursday, Federal Reserve Bank of New York President William Dudley offered a positive outlook for the USA economy, job market and inflation, saying better conditions would help support the most vulnerable Americans.
Gold, another classic safe haven asset, was trading at around $1,285 per ounce, up more than two percent this week and near a nine-week high.
Possibly due to the lack of appetite for risk in the market, the euro suffered on Thursday, down slightly against the dollar by 0.09% at 1.1749, slipping towards a two week low.
Another source of support to bullion was data showing US producer prices unexpectedly fell in July, pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.
Applebee's, IHOP to close up to 160 restaurants
Steering DineEquity's ship will be Stephen Joyce, the former CEO at Choice Hotels announced as the company's new leader Thursday. The second category consists of underperforming, and perhaps, even brand-damaging restaurants with unsustainable unit economics.
North Korea on Thursday outlined details for a missile strike near the USA territory of Guam, adding fuel to rising tensions with the United States. The index closed at 16.04 overnight, the highest level since November 8, when Trump was elected president.
USA stocks deepened their losses following the latest Trump comments, and the S&P 500 volatility index, known unofficially as the "fear index", rose decisively. The precious metal is often seen as a safe haven for investors during times of uncertainty.
The Labor Department said its producer price index for final demand edged down by 0.1 percent in July after inching up by 0.1 percent in June.
In bond markets, the yield on US Treasuries fell, also pressured by the lowered expectations for a Fed move.
Overnight, MSCI's broadest index of Asia-Pacific shares outside Japan had skidded 1.55 percent, its biggest one-day loss since mid-December, to leave it down 2.5 percent for the week.
Markets are now focused on US consumer price data for July, due later in the session.
Crude oil prices fell on Thursday, on concerns of lingering global oversupply as Russian Federation considered a future output resumption and OPEC boosted its July production numbers. Palladium added 0.4% to $899.80 per ounce and was on track to end the week about 2% higher.
The influential financial stocks were among the biggest drags on the index, with Royal Bank of Canada down 1.5 percent to C$92.88, and Manulife Financial Corp falling 4.7 per cent to C$24.43, its largest drop since early August previous year. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.5 basis points at 2.226 percent.