Asian shares pared gains and the dollar plumbed a fresh two-year low against the euro on Wednesday after disappointing U.S. jobs data vanquished any expectations that the Federal Reserve will taper its stimulus before next year.
Japan's Nikkei share average dropped 1 percent as a stronger yen took a heavy toll, but earlier touched a 3-1/2 week high.
Australian shares were slightly higher after hitting five-year peaks, though they pared gains after stronger-than-expected inflation data reduced expectations for another interest rate cut.
MSCI's broadest index of Asia-Pacific shares outside Japan was off its session highs but holding narrowly in positive territory, while profit-taking pushed Seoul shares off their highest level in more than 26 months.
"Slow growth in the U.S. economy is worrisome for global markets in the long term," said IM Investment & Securities analyst Kang Hyun-gee. "But in the near term, extended liquidity will work in favour of equities."
U.S. S&P 500 E-mini futures were slightly down, after the S&P 500 Index closed at a record high in New York on Tuesday.
U.S. nonfarm payrolls increased by 148,000 workers in September, less than expected. While the employment gain in August was revised up, the July figure was revised down to be the weakest since June 2012.
The report suggested the economy was losing momentum even before the U.S. fiscal standoff that partially shut down the government for more than two weeks, lending credence to the central bank's decision to hold off on reducing its stimulus.
"In light of the moderate tone of the September employment report, we have pushed out our expectation for the first Fed tapering in the pace of asset purchases to March 2014 from December 2013," strategists at Barclays wrote in a note to clients.
Nine of 15 U.S. primary dealers surveyed by Reuters on Tuesday expect the Fed to begin tapering its $85 billion-a-month bond-buying programme in March.
DOLLAR UNDER PRESSURE
The dollar tumbled 0.6 percent against its Japanese counterpart to 97.55 yen, with Japanese exporters said to have sold the U.S. unit, triggering stop-loss orders at 97.70 yen.
The euro was at $1.3786, after rising as high as $1.3793 on the EBS trading platform, its strongest since Nov. 2011.
The dollar index last stood at 79.157, after it fell to its weakest in eight months at 79.141 earlier, within sight of its 2013 low of 78.918 touched in February.
The Australian dollar was slightly lower, after jumping about a quarter of a U.S. cent after the CPI report.
The yield on benchmark 10-year Treasury notes edged down to 2.494 percent, its lowest since late July, after closing U.S. trade at 2.512 percent.
On the commodities front, concerns about a near-term U.S. crude surplus helped push U.S. crude prices down about 0.5 percent to $97.86 a barrel.
Copper slipped from near one-month highs as traders booked profits after the U.S. jobs report reinforced the metal's weak fundamental outlook, falling 1.0 percent to $7,260.
Gold inched 0.1 percent lower to $1,338.54 an ounce, having risen to a four-week high after the payrolls data.