MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5%, adding the previous session's 1.3% decline following the Chinese factory activity report.
As the yen strengthened sharply against the dollar overnight, Japan's Nikkei benchmark dropped 1.5% in relatively active trade after earlier touching a one-month low. The loss added to Thursday's 0.8% decline.
"Sentiment was already poor because of the poor US jobs data released early this month, and it was exacerbated by the Chinese figures," said Naoki Kamiyama, head of Japan equity strategy at Bank Of America Merrill Lynch in Tokyo.
A decline in the flash Markit/HSBC Purchasing Managers' Index for China, the world's second-largest economy, reinforced concerns about global growth, especially in commodity-sensitive emerging markets.
"As capital costs rise and investment slows, commodity prices should come under pressure, boding poorly for economies linked to China's old growth model," Morgan Stanley analysts wrote in a note.
Emerging currencies were battered overnight, with the Turkish lira hitting a record low against the dollar, the South African rand slumping to a 5-1/2 year trough and the Russian rouble falling to its weakest in nearly five years.
On top of that the Federal Reserve is expected to continue to dial back its bond purchases when it meets next week after US jobless claims data reflected an acceptable, if underwhelming, pace of job growth - heaping more pressure on emerging country currencies.
The Indonesian rupiah fell 0.2% to 12,180 per dollar, touching a two-week low on Friday morning, while Jakarta shares shed 1.2%.
The dollar stabilised against the euro, Swiss franc and the yen after taking a beating in the previous session.
The greenback was up 0.1% against a basket of major currencies, having fallen 0.9%, marking its worst one-day decline in three months and hitting a three-week trough.
The euro was a tad softer at $1.3686, though it remained near a more than one-week high of $1.3699. The single currency climbed 1.1% on Thursday, its biggest single-day gain since mid-September, on the back of mostly encouraging business surveys from the euro zone's private sector.
"We would be cautious of fading this risk aversion move given the scale of some of the losses in commodity and emerging forex, and the EUR may stay better supported in the near-term as EUR-funded risk positions are covered," analysts at BNP Paribas wrote in a note.
The yen advanced 1.2% against the dollar in the previous day, marking its biggest one-day gain since late August. The Japanese currency took a breather on Friday morning, down 0.2% at 103.51 yen to the dollar.
SLOW START FOR 2014
Wall Street has so far gone off to a stuttering start in 2014 after rallying nearly 30% last year.
On Thursday, US stocks fell, with the Standard & Poor's 500 off 0.9% and the Dow Jones industrial average down 1.1% to record its third consecutive day of losses. S&P 500 E-mini futures were up 0.1 in Asian trade on Friday.
In response, investors cut their positions in risky assets, buoying the safe-haven assets of gold and highly-rated government bonds.
Yields on 10-year benchmark US Treasuries hit a seven-week low of 2.7589% on Thursday, while those on German Bunds fell to 1.713%, also reaching a seven-week low.
Gold gave up some of Thursday's more than 2% jump. It was down 0.2% at $1,259.55 an ounce on Friday morning, though still not far from a six-week high of $1,265.40 set in the previous day.
US crude futures was little changed at $97.35 a barrel, not far from a three-week high of $97.84 hit on Thursday after data showed a larger-than-expected drawdown of distillate stocks caused by sustained cold.