Asian markets were mostly lower on Wednesday, with Dow futures tumbling and the safe-haven yen climbing amid political and legal turmoil surrounding President Donald Trump .
"Investors are deeply concerned that all the political noise will morph into economic risk as the political back-fence talk, speculation and dirty laundry could detract from Trump's key agenda: Tax reform," Stephen Innes, senior trader at OANDA, said in a note on Wednesday.
The Dow Jones industrial average futures for June tumbled 107 points to 20,828 by 2:16 p.m. HK/SIN, after trading as low as 20,802 earlier in the session, compared with the index's close at 20,979.75, as risk-off sentiment struck the market.
The Nikkei fell 0.53 percent, or 104.94 points, to end at 19,814.88, as the safe-haven yen strengthened in the wake of renewed political risk. The dollar was fetching just 112.34 yen at 2:17 p.m. HK/SIN, an around two-week low.
Hong Kong's Hang Seng Index edged down 0.19 percent by 3:26 p.m. HK/SIN. On the mainland, the Shanghai Composite ended down 0.26 percent, or 8.22 points, at 3104.74, while the Shenzhen Composite edged up 0.13 percent, or 2.42 points, to end at 1867.68..
In South Korea, the Kospi ended down 0.15 percent, or 3.52 points, at 2291.53.
Australia's S&P/ASX 200 dropped 1.10 percent, or 64.52 points, to end at 5786.00.
In the U.S., Trump defended his actions, saying on Twitter that he had "the absolute right" to share classified intelligence with Russian officials. The President's tweets came after his national security adviser told the media that the incident reported by the Washington Post did not take place.
Additionally, the New York Times published a report on Tuesday — later confirmed by NBC News — that then-FBI Director James Comey wrote a memo outlining a conversation in which Trump allegedly asked him to stop investigating now-fired national security adviser Michael Flynn. Trump later fired Comey, which the president admitted was in part influenced by an investigation to his campaign's ties to Russia.
Elsewhere, calls grew for a wider investigation as a key House Republican asked the FBI on Tuesday for any records it has on communications between Comey and Trump.
In currency news, the dollar continued to sag. The dollar index, which measures the greenback against a basket of rival currencies, was down at 97.941 at 2:24 p.m. HK/SIN, compared with levels above 99 last week.
"While there is no particular headline behind the move, a likely combination of slipping U.S. yields, softer oil prices and heightened political uncertainty in Washington are providing traders with this morning's toxic dollar elixir. While the market is fishing for a base this morning, momentum does suggest there is the potential for a deeper U.S. dollar selloff," OANDA's Innes said.
The euro rose to a six-month high as political event risk receded from the continent after Germany's ruling party Christian Democrats (CDU) performed well in recent elections. The common currency last traded against the dollar, rising as high as $1.1122, compared with levels under $1.09 last week.
DBS pointed to factors including European equity gains, narrower EU-member yield spreads against German Bunds.
"Receding political risks and stable growth are likely to fuel QE taper expectations," DBS said in a note on Wednesday. "Markets are pricing in a tighter policy over the next twelve months."
"Paradoxically, EU break-up fears have now given way to hopes for more EU unity and possibly German-led growth after the German elections," DBS said.
The Aussie strengthened against the dollar for a sixth straight session to trade at $0.7441.
Among stock movers, Australian banks weighed the market, with ANZ falling 1.29 percent and NAB down 2.13 percent. The sector has been under pressure since the Australian budget, announced last week, included plans to impose a levy on the earnings of large banks.
Additionally, in a note on Wednesday, ratings agency Moody's cited concerns that Australia's increasing household leverage, driven by surging home prices, and low wage growth were increasing risks for the country's bank sector.
In Japan, exporters were mostly lower, likely hurt by a stronger yen, which decreases overseas earnings when they are translated back to their home currency.
In Hong Kong, shares of Henderson Land fell 1.49 percent by 2:28 p.m. HK/SIN after the company won a bid for the Murray Road property in central Hong Kong, with a 50,000 Hong Kong dollar ($6,421) per square foot offer that marked a record high for the Chinese protectorate.
CIMB said in a note on Wednesday that it was positive on the deal, calling it a "quality asset at fair price."
It advised investors look for stocks of property companies that were likely to dispose of assets as the Murray Road price would set a new benchmark.
CIMB said that included Cheung Kong Property, which saw its shares rise 0.79 percent.
Oil stocks fell around the region as the crude prices stumbled after data showed U.S. inventories increased.
"Doubts are building on whether the rest of OPEC would agree to an extension of an output cut, even with Saudi Arabian and Russian participation," Mizuho Bank said in a note on Tuesday. "We expect cautious trading ahead of the official EIA inventory data tonight."
Shares of Singapore-listed Noble erased initial losses to trade up 6.82 percent by 2:34 p.m. HK/SIN. Those gains followed a more than 50 percent plunge since its earnings disappointed.
The rise in Noble shares might be due to short-covering, with SGX data indicating more than 16 million shares had been shorted as of Tuesday.
On Wednesday, Fitch downgraded Noble's credit rating to BB-minus from BB-plus, saying the outlook was negative. That followed a Moody's downgrade to Caa1 from B2 on Monday; it also had a negative outlook.
Chinese tech stocks are also likely to be in the spotlight, with the Hong Kong-listed Tencent expected to report earnings today. Nasdaq-listed Weibo and Sina released their earnings for the first quarter in the U.S. on Tuesday. Sina rose sharply after earnings per share came in at $0.50 per share, well above FactSet estimates of $0.17.
Tencent shares were up 0.39 percent at 2:34 p.m. HK/SIN.
Overnight in the U.S., the fell 2.19 points, or 0.01 percent to close at 20,979.75 and the S&P 500 slipped 1.65 points, or 0.07 percent, to end at 2,400.67, while the advanced 20.20 points, or 0.33 percent, to close at 6,169.87 after touching an intraday record high.