After a November rally built on optimism that the US Federal Reserve will cut interest rates next year, markets have pulled back this month on concerns the buying may have been overdone.
Data released by payroll firm ADP showed a smaller-than-forecast rise in private sector jobs, reinforcing views that the labour market and economy were slowing as inflation comes down.
Figures published Tuesday also showed job openings were falling.
That has fuelled bets on the Fed slashing borrowing costs, with some saying it will do so as early as the first quarter -- even as bank officials say they are keeping the option of another hike on the table.
Decision-makers hold their next policy meeting next week, and that will be pored over for clues about their plans for 2024.
The sharp slowdown in job creation, however, is causing some concern.
"The slowdown in hiring continues and is becoming more obvious," said Peter Boockvar, author of the Boock Report.
"What I'm mostly focused on right now is the trajectory of activity -- and all I see is slowing in multiple places, including now the labour market."
SPI Asset Management's Stephen Innes said: "The US labour market is showing signs of contracting much faster than expected.
"This is not necessarily a 'risk-on' panacea, especially if the downward momentum in the jobs markets picks up a good head of steam."
All three main indexes on Wall Street ended in the red, and Innes added that the pullback from November may be down to a fear that rate cut expectations might have been overdone.
Traders are pricing more than one percentage point of cuts next year, he said.
"While the growth outlook has moderated in recent weeks... the economy does not appear to be heading for a recession in 2024, which -- despite progress on inflation -- might not compel the Fed to cut as aggressively as the current market pricing might suggest," he warned.
He said a hawkish turn from the Fed or a data shock could spark a heavy sell-off in markets.
With all eyes on Friday's crucial non-farm payroll figures, Asian traders were taking cash off the table Thursday.
Tokyo and Manila fell more than one percent each, while Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei, Mumbai, Bangkok and Jakarta were also in the red.
London, Paris and Frankfurt fell at the open.
Traders were unimpressed with data showing a better-than-forecast rise in Chinese exports, with the data also showing imports fell unexpectedly, highlighting the continued weakness in the struggling economy.
The yen strengthened more than one percent to 145.60 per dollar -- from well above 147 earlier -- on speculation the Bank of Japan could announce a shift away from its ultra-loose monetary policy at its next meeting this month.
The currency has tumbled for much of the year owing to the BoJ's refusal to budge but officials are shifting their positions as inflation rises.
Governor Kazuo Ueda said handling monetary policy "will become even more challenging from the year-end and heading into next year", Bloomberg News reported.
Oil prices edged up, but they made little headway into the near four percent losses seen Wednesday that put US benchmark West Texas Intermediate below $70 for the first time since July.
Data pointing to a jump in US stockpiles compounded demand worries as economies slow, while traders remain sceptical that Saudi Arabia and its allies will stick to recently pledged deep output cuts.
Analysts have begun to consider the possibility that Riyadh could abruptly reopen the taps to maintain market share, similar to a move in 2014 to counter rising US production.
- Key figures around 0810 GMT -
Tokyo - Nikkei 225: DOWN 1.8 percent at 32,858.31 (close)
Hong Kong - Hang Seng Index: DOWN 0.7 percent at 16,345.89 (close)
Shanghai - Composite: DOWN 0.1 percent at 2,966.21 (close)
London - FTSE 100: DOWN 0.3 percent at 7,489.85
Dollar/yen: DOWN at 145.60 yen from 147.35 yen on Wednesday
Euro/dollar: UP at $1.0779 from $1.0768
Pound/dollar: UP at $1.2585 from $1.2559
Euro/pound: DOWN at 85.65 pence from 85.71 pence
West Texas Intermediate: UP 0.7 percent at $69.83 per barrel
Brent North Sea crude: UP 0.7 percent at $74.83 per barrel
New York - Dow: DOWN 0.2 percent at 36,054.43 (close)
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