TOKYO: Asian stocks fell on Wednesday after U.S. lawmakers called for an impeachment inquiry into President Donald Trump, increasing the prospects of prolonged political uncertainty in the world's largest economy.
The dollar nursed losses against most major currencies as the inquiry sets the stage for a fierce battle between Democrats and Trump's Republican Party over whether the president sought foreign influence to smear a political rival. The push for an impeachment inquiry and disappointing U.S. economic data weighed on Wall Street on Tuesday, pushing the S&P 500 0.84per cent lower, its biggest daily decline in a month.
"If an impeachment enquiry looks like ending his re-election chances in 2020, he may throw caution to the wind and harden his attitude to a China trade deal, increasing the chances of a global recession next year," said Jeffrey Halley, Senior Market Analyst, Asia Pacific, OANDA. The U.S.-China trade war, which has dragged on for more than a year, has added pressure on China's already slowing economy and has increased the risk of recession in other countries. Slower global growth would hurt demand for energy and other commodities.