The yen is often sought in times of geopolitical tension, partly because Japan has a big current account surplus, and it being the world's biggest creditor nation, there is an assumption Japanese investors may repatriate their foreign holdings in times of heightened global uncertainty. South Korea's Kospi fell 0.2 percent.
Frankfurt's DAX 30 was 0.4 per cent lower at 11,961.60 points.
MSCI's main index of Asia-Pacific shares, excluding Japan, was last down 0.6 percent.
Spot gold was almost flat at $1,285.76 per ounce at 0447 GMT and was set for a weekly gain of over 2 percent. North Korea also laid out detailed plans of how it would launch a missile strike on US military bases in Guam. There was not much reaction to Canadian housing data, which showed new home prices rose by 0.2% in June, missing expectations of 0.4%.
"What has changed this time is that the scary threats and war of words between the U.S. and North Korea have intensified to the point that markets can't ignore it", said Shane Oliver, head of investment strategy at AMP Capital in Sydney, as quoted by Reuters.
Trump took specific aim at North Korean leader Kim Jong Un, saying, he had "disrespected our country greatly", and would not be "getting away with it".
Stocks ended more than one percent down in Seoul while the won slumped to a three-week low against the dollar as the United States president and South Korea's volatile neighbor dramatically ramped up their war of words.More news: N.Korea Snubs S.Korea at ASEAN Forum
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Asian equities fell, driving the region's benchmark index to its biggest loss in a month, on rising geopolitical risk after President Donald Trump warned the US will retaliate against North Korea. Now installed in the White House, Trump issued a new warning to Pyongyang on Friday, tweeting: "Military solutions are now fully in place, locked and loaded, should North Korea act unwisely".
"U.S. markets had previously been becalmed amidst the Goldilocks scenario of strong profit growth, low interest rates and full valuations".
The dollar extended losses against the yen to hit a new two-month low.
Yesterday, the greenback had shed 0.8 per cent versus the yen, with the Japanese currency rallying broadly against most major currencies.
Shifting of funds from sliding equity to rising bullion markets also supported the upswing, they said. The yield on the 10-year Treasury note held steady at 2.26 percent. Travel-review website operator TripAdvisor was down 2.7 percent.
Gold prices traded at their highest level in more than two months Thursday, adding to the previous session's sharpest daily rise since the middle of May, as simmering North Korean tensions underpinned haven investments. It is set for a weekly gain of 2.4 percent. Brent crude, the global standard, shed 8 cents to $52.29 a barrel. They plunged 2 percent on Thursday on fears of slowing demand and lingering concerns over a global oversupply.
The euro dipped 0.1 per cent to $1.1733 but the single European currency has been slipping this week against the dollar, having hit a more than 2 1/2-year high of $1.1892 on August 2.