Stocks drop after U.S. data

Stocks in Brazil, Mexico and other Latin American markets also were lower. Japan's benchmark Nikkei closed down 63.78 points at 9,876.15, partly on caution ahead of the U.S. jobs data.

In the U.S. Treasury market, the benchmark 10-year note was up 12/32, with the yield at 3.5023 percent, versus Wednesday's close of 3.55 percent.

In currency markets, the euro was down about 1 percent at $1.4004 from a previous session close of $1.4150. The dollar was up against a basket of major trading-partner currencies, with the U.S. Dollar Index <.DXY> up 0.83 percent at 80.297 from a previous session close of 79.634.

Demand for the euro fell after European Central Bank President Jean-Claude Trichet said euro-zone activity would likely remain weak for the rest of the year, analysts said.

The European Central Bank, as expected, kept interest rates unchanged at 1 percent.

Also dimming some investors' views, Moody's downgraded its ratings for euro zone member Ireland to Aa1 from Aaa over concern about its debt.

OIL FALLS

U.S. crude oil prices dropped as the U.S. government jobs data sparked more concern about oil demand. On the New York Mercantile Exchange, August crude fell $2.58 to settle at $66.73 a barrel.

Next week's focus could be the Group of Eight summit in Italy after G8 sources told Reuters that Beijing has asked for a debate on proposals for a new global reserve currency and the issue could be referred to briefly in the summit statement.

Chinese Vice Foreign Minister He Yafei said he had not heard of such a request, but he said China hoped for diversification of the international currency system in the future and it would be normal for the issue to be raised at the G8 summit.