European stock markets posted modest rebounds from early losses on Friday as investors mulled growing concerns over the Federal Reserve's bond-buying scheme, dealers said.
Minutes from the Fed's December policy meeting indicated overnight that the US central bank's huge monetary easing measures could be scaled back sooner than expected.
Financial markets also examined the US government's jobs report for December, which showed only a bit of growth, as expected.
In afternoon trading, London's benchmark FTSE 100 index of top companies added 0.26 percent to 6,085.48 points, Frankfurt's DAX 30 index was up by 0.21 percent to 7,772.75 points and the Paris CAC 40 was flat at 3,720.25.
On Wall Street, the Dow Jones Industrial Index was essentially unchanged at 13,387.59 points in early trading, while the broad-based S&P 500 edged up 0.05 percent and the Nasdaq Composite slipped 0.07 percent.
"The (Fed) minutes turned out to be somewhat hawkish in nature and subsequently approached the topic bringing at least some of the current $85-billion monthly asset purchases to a halt," said Alpari analyst Craig Erlam.
"This was in large part owing to the perceived lack of effect being felt by such actions in the market. Overall this is pointing towards 2013 seeing the end of US QE (quantitative easing) as we know it."
The euro had also fallen sharply in early trading, but then bounced back to $1.3042, from $1.3052 late on Thursday in New York.
The dollar struck its highest level against the yen for more than two years early in the day, as yen-selling sentiment remained strong after Japan's new prime minister vowed to push for aggressive monetary easing.
The greenback soared at one point to 88.33 yen, the highest level since July 2010, compared with 87.19 yen late Thursday.
On the London Bullion Market, gold prices sank to $1,632.25 per ounce from $1,679.50 on Thursday.
Meanwhile, British investor sentiment was hit by news that the British services sector shrank last month for the first time for two years, stoking speculation over contracting economic growth in the fourth quarter of 2012.
The Markit/CIPS purchasing managers' index (PMI) survey showed a reading of 48.9 in December, down from 50.2 in November. That was below the 50 mark which separates growth from contraction.
For Germany, home to Europe's biggest economy, the reading was better however, as it posted a preliminary figure of 47.2 points, up from 46.5 points in November.
That offered "some hope that the eurozone is showing signs of lifting out of its deep double-dip recession," said Markit chief economist Chris Williamson.
In Asia on Friday, Tokyo and Shanghai stocks advanced on their first trading day of 2013, but other markets retreated in line with losses on Wall Street.
Hong Kong dipped 0.29 percent, Sydney shed 0.36 percent and Seoul was off 0.37 percent.
Tokyo however climbed 2.82 percent and Shanghai shares closed up 0.35 percent.
Shares had broadly climbed on Wednesday and Thursday after US lawmakers agreed a last-minute deal to avert the fiscal cliff of tax hikes and spending cuts that could have sent the world's biggest economy into recession.
However, while the tax problem was addressed, another row is expected as a deal must be struck within two months to deal with billions of dollars of spending cuts and raise the US debt ceiling.