Asian shares slipped on Thursday as a deadline loomed for fresh U.S. tariffs on China and amid speculation, U.S. President Donald Trump's political position could be threatened by the legal woes of two former advisers.
U.S. and Chinese officials met for the first time in over two months to find a way out of their deepening trade conflict, but there was no evidence the low-level discussions would halt a new round of U.S. tariffs due Thursday.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 percent. Hong Kong's Hang Seng index fell 0.5 percent while South Korea's Kospi eased 0.1 percent.
Japan's Nikkei added 0.2 percent while Chinese shares were a bit firmer too.
Moody's cited the U.S.-led trade war as a risk to global growth with emerging markets already battling high oil prices and a tightening of financial conditions.
"Emerging market countries remain inherently vulnerable to the risk of capital outflows associated with tightening global liquidity as advanced economy central banks reverse their quantitative easing measures," Moody's added.
"Escalating trade frictions further add to the overall uncertainty."
In its research titled "Storm Squalls", Citi said that divergence in the various trade disputes between the United States and its trading partners is likely to be a key driver for markets.
"Trade tensions have narrowed to the U.S. vs China; however, there is no such thing as a bilateral trade war," it added.
"Despite recent signs that trade talks are resuming, we expect U.S.-China trade tensions to continue."
Australian shares were a tad softer amid political uncertainty over the future of Prime Minister Malcolm Turnbull after several senior ministers tendered their resignations on Thursday.
The turmoil hit the Australian dollar, which slipped 0.8 percent for its second straight day of decline.
"The PM has been losing popularity in the polls but as far as the markets are concerned he's been a steady hand at the tiller for the Australian economy and that's why we're seeing this move to the downside in the currency," said Nick Twidale, an analyst at Rakuten Securities.
Another focus for investors will be manufacturing data from Europe and the United States later in the day as investors gauge whether the spectre of a global trade war is hurting economic activity.
A survey on Thursday showed Japanese manufacturing activity grew at a slightly faster pace in August as domestic demand jumped, but export orders contracted, adding to worries about rising trade protectionism.
The lead from Wall Street was mixed overnight even as the S&P 500 marked its longest bull-market run in history. The Dow fell 0.3 percent, the S&P was mostly unchanged and the Nasdaq added 0.4 percent.
Investors are considering whether a twin political setback to Trump would hurt the Republican Party's election prospects and widen a criminal probe that has overshadowed his presidency.
Trump was not charged and Cohen's plea deal does not mean the president has been implicated in anything, press secretary Sarah Sanders said at a White House briefing.
The dollar index, which measures the greenback against a basket of major currencies, gained after minutes of the Federal Reserve's latest policy meeting showed the U.S. central bank was on course to further hike rates.
The index was last up 0.3 percent at 95.394, after six straight sessions of losses took it to the lowest in three weeks.
The euro was last off 0.3 percent at $1.1553, not far from Wednesday's two-week high of $1.1623 touched on Wednesday. The Japanese yen weakened 0.3 percent to 110.85 per dollar.
In commodities, Brent crude, the international benchmark, was flat at $74.78. U.S. crude gained 11 cents to $67.97.
U.S. gold futures for December delivery fell 0.5 percent while spot gold dipped 0.4 percent to $1,190.5 an ounce.