Asian equities declined as investors worried about escalating trade tensions between the US and China.
Meanwhile, the yen remained strong after reaching a six-week high, likely due to suspected interventions by Tokyo.
The US dollar hovered near its weakest level in four months against a basket of currencies, as comments from Federal Reserve officials strengthened the case for a rate cut in September, keeping gold near record highs.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6%, with a sub-index of IT stocks down 2.5%. Tech-heavy South Korean shares dropped 1.5%, while Taiwan stocks decreased by 2%.
The yen’s strength and a sharp decline in chip stocks led Japan’s Nikkei to fall more than 2%.
A report indicating that the United States was considering tighter restrictions on exports of advanced semiconductor technology to China triggered a sharp sell-off in chip stocks, causing the Nasdaq to tumble overnight.
On Wednesday, the S&P 500 lost 1.4%, closing at 5,588.27, and the tech-heavy Nasdaq Composite index dropped 2.8%, closing at 17,996.93.
The Dow Jones Industrial Average, which has underperformed the other two major US stock indexes this year, ended 0.6% higher, marking its third consecutive record-closing high.
The yield on benchmark 10-year US Treasury bonds fell to 4.152% on Wednesday, down from 4.167% late on Tuesday. During trading yesterday, the yield hit 4.146%, its lowest since March 13.
