By Dominic Lau TOKYO (Reuters) - Asian shares lurched to a 4-1/2 month low on Friday, extending the previous day's weakness as disappointing Chinese manufacturing data raised concerns over the economy, and emerging and commodity currencies took a beating. Investors sought safety in gold, the yen and highly-rated government bonds, sending the 10-year U.S. Treasury yield to a seven-week low. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.8 percent, adding to the previous session's 1.3 percent decline following the Chinese factory activity report. As the yen strengthened against the dollar, Japan's Nikkei stumbled 1.9 percent to a one-month closing low in relatively active, extending Thursday's 0.8 percent drop. "Sentiment was already poor because of the poor U.S. 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. European shares were likely to open steady to modestly higher after Thursday's sell-off, according to financial bookmakers. 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. Emerging currencies were battered overnight, with Argentina's peso suffering its steepest daily decline since the country's devastating 2002 financial crisis, as the central bank gave up its fight against the unit's decline. The Turkish lira slipped 0.1 percent to 2.295 per dollar, not far from a record low of 2.2588 set on Thursday. On top of that, the Federal Reserve is expected to continue to dial back its bond purchases when it meets next week after U.S. jobless claims data reflected an acceptable, if underwhelming, pace of job growth - heaping more pressure on emerging-country currencies. The Indian rupee fell to a two-week low of 62.27 to the dollar, while the Indonesian rupiah fell as low as 12,180 per dollar, also hitting a two-week trough. Against the Aussie dollar, the greenback climbed to a 3-1/2 year high of $0.8689 after Reserve Bank of Australia board member Heather Ridout was reported saying the Australian currency had not fallen enough. The U.S. dollar paused for breath after slipping 0.9 percent against a basket of major currencies, including the euro, yen, Swiss franc and sterling, the previous day. Thursday's drop marked its worst one-day performance in three months. The euro was little-changed at $1.36925, though it remained near a more than one-week high of $1.3699. The common currency climbed 1.1 percent 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. "When investors avoid risk, they buy currencies backed by a current account surplus," said Sho Aoyama, senior market analyst at Mizuho Securities in Tokyo. Data published on Thursday showed the euro zone current account surplus hit a record high in November. The yen inched up 0.2 percent to 103.10 yen to the dollar, adding to a 1.2 percent rally the previous day, marking its biggest one-day gain since late August. STUTTERING START TO 2014 Wall Street has so far got off to a stuttering start in 2014 after rallying nearly 30 percent last year. On Thursday, U.S. stocks fell, with the Standard & Poor's 500 off 0.9 percent and the Dow Jones industrial average down 1.1 percent to record its third consecutive day of losses. S&P 500 E-mini futures were down 0.1 in Asian trade on Friday, pointing to possibly further weakness on Wall Street. As investors cut their positions in risky assets, safe-haven gold and highly-rated government bonds were in demand. Yields on 10-year U.S. Treasuries hit a seven-week low of 2.7589 percent on Thursday, while those on German Bunds fell to 1.713 percent, also reaching a seven-week low. Gold was a tad softer at $1,261.25 an ounce after jumping more than 2 percent on Thursday. The precious metal touched a six-week high of $1,265.40 in the previous day. U.S. crude futures were up 0.2 percent at $97.51 a barrel, near 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.