Investors will turn to next week's Jackson Hole symposium, where remarks from the Federal Reserve chair could offer fresh clues on the U.S. interest-rate outlook.
Asia, central Europe and Turkey move higher
In Asia, South Korea's KOSPI .KS11 and Taiwanese shares .TWII edged higher, though both remained on track for weekly losses of nearly 1%.
The South Korean won KRW=KFTC rose 0.9% to an 11-month high and was set for a weekly gain of more than 2%, while the Taiwan dollar gained 0.7%.
TWD=TP
China's yuan CNY=CFXS hovered near a 3-1/2-year peak. The Shanghai Composite .SSEC was little changed, while the blue-chip CSI 300 .CSI300 rose 0.6%.
China will roll out additional fiscal measures in response to evolving economic conditions, Vice Finance Minister Liao Min said on Friday, as growth slows in the world's second-largest economy.
In emerging Europe, the Czech koruna CZKEUR=R fell 0.4% against the euro, while Czech stocks .PX rose 0.4%. The country's Finance Ministry lowered its economic growth outlook on Thursday.
Poland's zloty PLNEUR=R slipped 0.1%, while stocks .WIG gained 0.9%. The government is proposing to raise the corporate tax rate for large utilities and fuel companies to 30% in 2027, state news agency PAP reported on Thursday. Hungarian markets were closed for a public holiday.
Elsewhere, Turkish stocks .XU100 gained 0.9% and the lira TRYTOM=D3 rose 2%, after business confidence among manufacturers increased to 102.8 points in August. A reading above 100 indicates optimism.
The South African rand ZAR=D3 strengthened 0.7% as gold prices edged higher and remained on course for a third straight weekly gain.
Emerging-market currencies extend record run
Emerging-market currencies climbed to the latest record highs on Friday and were on track for an eighth consecutive weekly gain, as investors looked past elevated U.S. Treasury yields and higher oil prices while the dollar lingered near multi-month lows.
MSCI's emerging-markets currency index .MIEM00000CUS rose 0.3% on the day, extending a run of all-time highs this month as broad dollar weakness continued to support risk-sensitive assets.
Dollar weakness and oil prices keep focus on macro risks
U.S. Treasury yields resumed their climb after a surprise Treasury intervention on Wednesday offered only brief relief from selling pressure. The rise came even after U.S. Treasury Secretary Scott Bessent said the government could increase Treasury buybacks and raised the prospect of fiscal consolidation.
The dollar was set for broad weekly losses amid concerns that rising U.S. debt and policy uncertainty could erode the currency's purchasing power.
Contrary to the concerns, Juan Orts, CEEMEA economist at Societe Generale, said: "You can do these temporary buybacks in order to stabilize the situation in the bond market. But I think that sooner or later the fundamentals kick in."
"I don't really see markets just starting to sell dollars just because of this. The dollar should continue to be strong over the coming months."
Oil prices rose to one-month highs as a diplomatic deadlock in the Gulf kept inflation risks in focus. Still, emerging-market assets largely shrugged off those concerns, with MSCI's EM stock index .MSCIEF up 1.2%.
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