US equity indexes fell this week as threats of a trade war with Europe exacerbated a move in Treasuries following seismic shifts in government bond yields from Japan, one of the world's biggest holders of US debt.

* The S&P 500 closed at 6,915.61 on Friday versus 6,940.01 a week ago. The Nasdaq Composite stood at 23,501.24 compared with 23,515.39 a week earlier, and the Dow Jones Industrial Average ended at 49,098.71, versus 49,359.33.

* On Jan. 17, President Donald Trump threatened a 10% tariff on eight European allies, effective Feb. 1, rising to 25% in June if the Greenland issue remained unresolved. "This tariff will be due and payable until such time as a deal is reached for the complete and total purchase of Greenland."

* In response, the European Parliament's trade committee postponed a vote on the European Union's previously signed trade deal with the US.

* However, following a meeting with Mark Rutte, NATO's Secretary General, Trump said he had formed a framework of a "future deal" for Greenland and rescinded planned tariffs on the eight countries.

* US yields rose following a "huge" sell-off overnight Monday in super-long Japanese government bonds, a Mitsubishi UFJ Financial Group note said. Prime Minister Sanae Takaichi's Liberal Democratic Party proposed a temporary sales tax cut on food ahead of a likely snap election, a highly populist move in a fiscally conservative Japan.

* Higher Japanese yields mean a narrower spread with US Treasuries, reducing the appeal of yen-funded carry trades that have soaked up US government debt. Japan holds about $1.2 trillion of US government bonds, a Stifel note said.

* Trump could receive a setback at the Supreme Court over his move to fire Fed Governor Lisa Cook, BBC reported. Justice Brett Kavanaugh, a conservative appointed by Trump, was among those expressing sympathy with Cook's arguments, asking, "What's the fear of more process here?"