The Turkish lira, seen as an emerging markets weak link, fell more than 1 per cent after data showed June inflation accelerating to 14-year highs, hit by oil prices and the pass-through from currency weakness.
Chinese currency and equity markets have been on edge ahead of Friday, when United States tariffs on US$34 billion (S$46.5 billion) worth of Chinese goods kick in.
MSCI's gauge of stocks across the globe gained 0.23 percent. Retail stocks were down 3.58 percent, with Fast Retailing lower by 2.87 percent.
The mood was more cheerful in Europe where a pan-European equity index rose 1 percent, the euro firmed and bond yields climbed after German Chancellor Angela Merkel struck a migration deal with her Bavarian conservative coalition partners.
Hong Kong's markets were closed for a holiday. "Now, I think, the realization comes in that downside risk could be more significant", Rainer Michael Preiss, executive director at Taurus Wealth Advisors, told CNBC's "Capital Connection".
The Chinese yuan, on a downward spiral since mid-June, slipped past 6.7 per dollar in early trading on Tuesday for the first time since August 9, 2017 before paring losses on talk of intervention by the Chinese central bank.
Major currencies marked time on Wednesday while the Chinese yuan recovered from 11-month lows, after efforts by authorities the previous day to calm financial markets which had been rattled by worries about trade wars. Traders and economists say major state-owned banks sometimes act on behalf of the central bank in the foreign exchange interbank market.
In a statement posted on the Chinese central bank's website Tuesday, Governor Yi Gang said it's "paying close attention" to recent fluctuations in the market and will seek to keep the yuan stable at a reasonable level.
On equity markets, Hong Kong dived as much as 3.3 per cent at one point to nine-month lows, hit also by a U.S. move to block China Mobile from offering services to the United States market. He also said that the yuan wouldn't be used as a weapon in a trade war with the U.S.
Also on Monday, Washington moved to block China Mobile from offering services to the US telecommunications market, recommending its application be rejected because the government-owned firm posed national security risks.
The pair last traded at C$1.3115, its highest level in 2-1/2 weeks. Japan's Nikkei edged to a near three-month closing low.
Focus was on whether the RBA makes a mention of the recent U.S. -China trade tariffs, traders were more concerned about jettisoning risk which could have contributed to the amplified price action.
Stock markets in Europe and the United States advanced on Thursday, offsetting more losses in Asia as investors were encouraged by economic data from Germany and a report that its big carmakers could be spared from US tariffs.
The Aussie was steady at $0.7338 after dropping to $0.7311 overnight, its lowest since January 2017.