The rupee's gains were driven by moves from Indian officials to deal with the spillover from the Fed's plans to reduce its bond buying, while markets were also watching a meeting of the G20 bloc of world powers for measures to combat the currency unheaval.
A $100 billion BRICS fund to steady currency markets, announced at the summit by Russia and China, had limited impact on cautious investors.
Many markets are remaining on pause as a U.S. airstrike on Syria appeared to be a step closer, while a strong figure in the U.S. non-farm payrolls data on Friday could settle the debate in favour of Fed policy withdrawal.
"Sentiment on emerging markets is so fragile it can turn on a single headline," said Stanislava Pravdova, an analyst at Danske Bank in Copenhagen. "Data has told us the Fed will start tapering but the fear for emerging markets is (the Fed) will be more hawkish than the markets are pricing."
India's rupee rose to one-week highs versus the dollar however after new central bank governor Raghuram Rajan, an ex-IMF chief economist, announced a series of financial liberalisation steps.
Mumbai stocks jumped 2 percent, outperforming broader emerging equity index which rose just 0.4 percent. Ten-year bond yields eased 10 basis points after the previous session's 20 bps fall.
But the rupee move stood out in an otherwise lacklustre market where U.S. car sales data, latest in a series of upbeat U.S. numbers, hardened up expectations the U.S. Federal Reserve will start reeling in its stimulus this month.
That has pushed up 10-year U.S. yields to 2.94 percent, the highest since 2011.
The stimulus issue is being mulled at the G20 with China and Russia urging the Fed to be cautious. At $100 billion, the proposed BRICS fighting fund is much smaller than the $240 billion originally envisaged and officials said it would not be functional for some time yet.
Stuart Culverhouse, head of research at Exotix said he did not expect the G20 to make much impact.
"It's difficult to coordinate anything in talking shops for international policy," he said. "Some emerging markets have been looking for better international coordination of monetary policy to protect their currencies, but I don't imagine U.S. policymakers building inflation in Brazil into their policies."
Many argue still-loose global monetary conditions and economic recovery will help emerging markets. Japan maintained its monetary stimulus on Thursday, while euro zone's central bank is expected to signal again that its interest rates will remain low for a while. Britain kept policy unchanged.
While recovery in the developed world is historically a positive for emerging markets, Danske's Pravdova said: "It will help but there is a lag. We won't see a pickup in EM before next year."
In emerging Europe, the Turkish lira fell to a record low hit by the prospect of military action against neighbouring Syria, the rising oil price and the central bank's refusal to raise rates to defend the currency.
The Polish zloty meanwhile fell 0.3 percent versus the euro and five-year bond yields rose to 10-month highs after the government told private pension funds to transfer the bonds they hold to the state - one-fifth of the total - while abolishing a rule that required all citizens to contribute.
Polish stocks fell more than 1 percent
The overhaul will help Poland push down public debt and boost public spending but analysts say the move will marginalise the private pension system, distort markets and dent Poland's reputation as a pro-market haven.
Societe Generale analysts advised clients to sell zloty.
"The government's decision is disappointing for the market and has undermined investor confidence," they wrote.
"It will negatively affect liquidity on the bond market and will make it even more dependent on foreign investors, whose share of the debt market will rise in line with the cancellation of domestic-held bonds."