Major U.S. stock indexes recorded declines of more than 1 percent across the board on Tuesday, with the Dow Jones industrial average falling 1.16 percent, or 299.24 points, to close at 25,410.03.
The moves came after Federal Reserve Chairman Jerome Powell's positive assessment of the economy during his testimony before Congress on Tuesday. Powell also indicated that the central bank raising interest rates more than three times was a possibility as inflation moves "up to target."
"The gist is that even as [Powell] espoused that the Fed will continue to normalize policy at a gradual pace, markets suspect his confidence could rub off to four rate hikes for 2018, instead of the three penciled in," Chang Wei Liang, a strategist at Mizuho Bank, said in a note.
U.S. Treasury yields rose on the back of those remarks, with the yield on the benchmark 10-year Treasury note standing at 2.9 percent during early Asian trade.
Following Powell's Tuesday testimony, the dollar index, which tracks the U.S. currency against a basket of rivals, was steady at 90.345 after bouncing in the last session.
Against the yen, the dollar pared overnight gains to trade at 107.06 at 3:34 p.m. HK/SIN, below Tuesday's close of 107.36. The move also came as Japan's central bank slightly reduced the amount of 25 to 40-year Japanese government bonds to 70 billion yen ($652 million) it offered to purchase, Reuters reported.
Meanwhile, the Australian dollar edged up after falling as low as $0.7780 in the last session with the firmer dollar. The Aussie dollar last traded at $0.7805.
In corporate news, South Korean steelmaker Posco fell 4.49 percent. The company said Tuesday that it would purchase a maximum of 240,000 tons of lithium concentrate each year from Australia's Pilbara Minerals, Reuters reported.
Meanwhile, shares of Australian retailer Harvey Norman plunged 12.45 percent after the company reported a 19.3 percent fall in first-half profit.
On the commodities front, oil prices extended losses after last session's declines. U.S. West Texas Intermediate crude futures slipped 0.38 percent to trade at $62.77 per barrel. Brent crude futures edged down by 0.23 percent to trade at $66.48.
Economic releases for the day included January retail sales out of Japan, which rose 1.6 percent on year, missing a 2.1 percent increase projected.
Ahead, the release of India's fourth-quarter GDP is expected later in the day at 8:00 p.m. HK/SIN.
— CNBC's Huileng Tan contributed to this report.