By Nichola Saminather and Hideyuki Sano
SINGAPORE/TOKYO (Reuters) - Asian shares extended losses on Friday as caution over a U.S. jobs report overshadowed signals from the European Central Bank that it is willing to take further steps to shore up the European economy.
Financial spreadbetters expected Britain's FTSE 100 to open down as much as 1.5 percent, Germany's DAX to fall as much as 1.7 percent and France's CAC 40 to drop as much as 1.8 percent.
U.S. stock futures fell 0.8 percent during the Asian day, pointing to a weaker opening on Wall Street as well after U.S. stocks ended slightly higher overnight.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8 percent, and was on track to end the week down 4.2 percent.
Japan's Nikkei fell 1.9 percent after earlier plunging 3.2 percent to a seven-month low of 17,608.17. The index is set for a weekly loss of 6.8 percent.
"Only one theme is on every trader's mind today - the U.S. jobs report tonight and how that may possibly play into the Fed's September rate decision," said Nicholas Teo, analyst at online trading platform provider CMC Markets in Singapore.
A strong jobs number could help ease fears about a China-led global economic slowdown but it could rekindle speculation of an early rate hike, which could hurt riskier assets, particularly in emerging economies.
Economists polled by Reuters expect the U.S. economy produced 220,000 new non-farm jobs last month, continuing the robust employment creation of the past five years, while average hourly earnings are predicted to have risen by a modest 0.2 percent, as they did in July.
A drop in average prices charged by U.S. service businesses in August after 25 months of increases supports the case for a delay in rate hikes even though the overall service sector expanded at the fastest pace since May.
While the Fed has so far stuck to its script that interest rates will likely be raised this year, the ECB and China's central bank are tilting towards more easing.
The ECB cut its growth and inflation forecasts on Thursday, warning of possible further fallout from China and paving the way for an expansion of its already massive 1 trillion-euro plus asset-buying programme.
For the first time, ECB President Mario Draghi also said explicitly the bond-buying programme may run beyond September 2016 and the bank may adjust its size and composition.
"It looked as if the ECB is preparing stimulus," said Masahiro Ichikawa, senior strategist at Mitsui Sumitomo Asset Management. "As it cut its growth projections and uncertainty over emerging economy is rising, it probably had to show that it is ready to take action."
That pushed down German 10-year yields, the benchmark for euro zone borrowing costs, to 0.730 percent, compared to a two-week high of 0.82 percent hit on Monday.
The euro also fell to a two-week low of $1.10875 and it last fetched $1.1124. Against the yen, the common currency hit 132.73 yen, the lowest in more than four months.
The yen's surge against the euro also nudged it up versus the dollar. The greenback slipped 0.7 percent to $119.27 yen.
The Australian dollar was down 0.8 percent at $0.6962 after stooping to a new 6-1/2 year trough of $0.6959.
In commodities markets, which have been battered by fears of a hard landing in China, trade remained highly volatile.
After gains in early trading, Brent crude futures slipped 1.1 percent to $50.10 per barrel.
Copper fell 1.2 percent to $5,181 per tonne after surging to $5,314 on Thursday, its highest in over three weeks, as bearish investors closed out positions ahead of U.S. job data.
Aluminium also shot up, touching a one-month peak $1,641 a tonne on the London Metal Exchange on Thursday. It was last trading down 0.6 percent at $1,620.
China's financial markets were closed on Friday for a national holiday.
A flood of data from China in coming weeks is likely to point to further weakness in the world's second-largest economy, reinforcing expectations that Beijing needs to roll out fresh stimulus measures and keeping global financial markets on edge.
