The talk (in Washington) is that there must be a preventive strike made on North Korea, while Pyongyang is threatening to carry out a missile strike on the USA base in Guam. The FTSE 100 ended 44.67 points lower at 7498.06. Copper rose 1 cent to $2.91 a pound.
The Korean won continued to fall versus the dollar, down 0.13 percent to 1,143.5 on Friday for a 1.6 percent decline on the week. India's Sensex shed 0.2 percent to 31,951.28 and benchmarks in Taiwan, New Zealand and Thailand also declined.
Australian shares were down 1.3 per cent, set for a weekly loss of 0.6 per cent.
US President Donald Trump's brinkmanship in the escalating tensions with North Korea has taken a heavy toll on global markets, wiping $1 trillion off the value of shares worldwide.
"While the US President insists on ramping up the war of words, there is a decreasing chance of any diplomatic solution", Carnell said.
Trump suggested in remarks on Thursday that his comments threatening North Korea with "fire and fury" may not have been tough enough.
The franc wasn't the only beneficiary to the risk-off sentiment sweeping markets.
The CBOE Volatility Index, the most widely followed barometer of expected near-term USA stock market volatility, hit its highest mark since November 8, when Mr Trump was elected President of the US. The index closed at its highest level since November 8, when Trump was elected president.
Wall Street's so-called "fear gauge", the CBOE Volatility Index, hit the highest levels since Election Day on Friday (http://www.marketwatch.com/story/wall-streets-fear-gauge-on-course-for-biggest-weekly-surge-in-2-years-2017-08-11), after a spike on Thursday but was retreating in recent trade. Spot gold reached a two-month high.
It was down 0.2 per cent at 108.98 yen, after retreating 0.7 per cent on Thursday.
The Swissie, as traders sometimes call the currency, tends to gain during times of economic or geopolitical stress.
Gold has risen to its highest level in nearly two months, while the Swiss franc has powered against the USA dollar and seen its biggest one-day gain against the euro in more than two and a half years. "Unsurprisingly, the yen, which is still the second best performer in the G10 foreign exchange space, is playing second fiddle to the Swiss franc due to Japan's proximity to the epicentre in Pyongyang". The yen appreciated against the USA dollar.
On the US economic front, a report released by the Labor Department showed a modest uptick in consumer prices in the U.S.in the month of July. Weakness in U.S. Treasury yields may also be supporting the yen. It soared over two per cent in the previous two sessions, and is set for a weekly gain of 2.25 per cent.
Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in US crude inventories, leaving prices volatile.