Asian markets closed sharply lower on Friday, tracking steep declines in U.S. and European stocks, which took a hit on fears of a potential trade war. In Tokyo, the fell 4.51 percent, or 974.13 points, to close at 20,617.86 after earlier dropping to its lowest levels in more than five months. The benchmark also fell 4.88 percent for the week. Gains in the yen, which touched its highest levels in 16-months earlier and slipped below the 105 mark, on trade-related fears also did not help stocks. Major exporters were downbeat, with Honda Motor falling 5.27 percent and Sony losing 2.73 percent. The broader Topix lost 3.62 percent amid a broad-based sell-off. The Topix machinery and mining indexes were among the biggest losers, falling 5.62 percent and 4.45 percent, respectively.

Meanwhile, Seoul's benchmark Kospi index lost 3.18 percent to close at 2,416.76, as shares fell broadly. Technology names fell sharply, with heavyweight Samsung Electronics sinking 3.98 percent and SK Hynix losing 6.21 percent. Greater China markets plunged in early trade, with Hong Kong's sinking 3.16 percent by 3:00 p.m. HK/SIN. Beyond trade tensions, the market was also weighed down by a 4.55 percent slide by 3:10 p.m. HK/SIN in index heavyweight Tencent due to a major shareholder's plan to sell its stake in the tech company. Stocks on the mainland also came under pressure from mounting trade tensions. The dropped 3.38 percent to close at 3,153.09 and the Shenzhen composite lost 4.49 percent to end at 1,766.61. In Sydney, the S&P/ASX 200 slid 1.96 percent to finish at 5,820.70 as all sectors closed in the red. Declines were led by the materials subindex, which lost 2.68 percent. Oil producers were also weaker. Meanwhile, most steel and aluminum plays in the region took a beating. In China, Baoshan Iron & Steel closed down 3.87 percent, and Aluminum Corp of China (Chalco) fell 3.51 percent. South Korean steel stocks also saw steep losses, with Posco falling 5.58 percent by the end of the day. Dongbu Steel, a smaller player, pared early gains to close down 6.09 percent. South Korea is one of the countries temporarily exempt from recent U.S. steel tariffs.

Trade jitters spook markets