Asian shares and the euro were pressured on Friday as European leaders argued over how to ease borrowing strains in Italy and Spain and stop the euro zone debt crisis spreading, with investors fearful of US reaction to the deadlock.
"Investors are waiting for further developments overnight in Europe and the reaction in Wall Street before making their bets," said Cho Byung-hyun, an analyst at Tong Yang Securities.
"Trading looks to be quiet as the market braces for what might be a busy Monday."
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.2%, down 9.9% on the quarter and on track for its first quarterly loss since end-September.
Japan's Nikkei average opened down 0.7%.
As the first of a two-day EU summit drew to a close on Thursday, European Council President Herman Van Rompuy announced a deal in principle for a 120 billion euro growth package and moves to boost capital for the EU's lending arm, the European Investment Bank.
But Italy, Spain and some other countries refused to sign off on the deal until they saw steps to allow euro zone rescue funds to buy their government bonds and support their banks.
"What the markets want to see is more clarity in the scheme to allow the rescue fund to buy Italian and Spanish bonds and progress in a roadmap for banking supervision and deposit insurance scheme," said Masafumi Yamamoto, chief FX strategist at Barclays in Tokyo.
"Markets will remain guarded until there is certainty in these key issues, keeping the euro in ranges with a downside bias," he said.
The euro stood around $1.2442, above its lowest against the dollar in more than three weeks of $1.2407 reached on Thursday.
Euro zone finance officials have proposed to the bloc's leaders that a single banking supervisory body be set up as soon as possible, according to a document drafted at an EU summit on Thursday, and allow the euro zone's permanent rescue fund to recapitalise struggling banks directly, rather than having to lend to governments.
Van Rompuy and European Commission President Jose Manuel Barroso have set long-term goals of creating a euro zone treasury to issue joint bonds in the medium-term, and establishing a banking union with central supervision, a joint deposit guarantee and a resolution fund.
But Germany opposes common euro bonds, putting priority on fiscal and economic policies.
The EU divisions pushed Spanish 10-year yields above 7%, a level widely seen as unsustainable, on Thursday. Investors were relieved Italy sold five and 10 year bonds at the top of its issuance range and the market absorbed the supply without a hitch, but its borrowing costs on both issues rose to their highest since December.
As the prolonged euro zone debt crisis continues to stifle global growth prospects, crude oil futures were on track for the worst quarterly performance since the 2008 financial debacle.
Early on Friday, US crude was up 0.9% at $78.37 a barrel and Brent also recovered up 0.7% at $91.96 a barrel.
Data showed the US economy is losing momentum, while Germany's unemployment rose in June, posing a risk for global growth.
But China, the world's second-largest economy, may stabilise in the third quarter and the government is confident it can meet its growth target of 7.5% for 2012, the chief researcher at the finance ministry said on Thursday.
Asian credit markets were subdued, with the spread on the iTraxx Asia ex-Japan investment-grade index widening by 1 basis point.