Asian shares slipped to three-week lows on Friday as the release of a whistleblower complaint against the US President Donald Trump added to worries about the global economy, already reeling from the China-US trade war.
MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.35 per cent on Friday, having fallen 1.65 per cent so far this week, while Japan's stock market Nikkei slid 1.30 per cent. MSCI is a global provider of equity, fixed income and stock market indexes.
Whereas, US S&P 500 futures fell 0.13 per cent in Asian trading on Friday after the index dropped 0.24 per cent on Thursday. S&P 500 measures performance of the US economy through changes in the aggregate market value of 500 stocks representing all major industries.
A whistleblower report released on Thursday said Mr Trump not only abused his office in attempting to solicit Ukraine's interference in the 2020 US election for his political benefit, but that the White House tried to "lock down" evidence about that conduct.
The report came after the Speaker of the US House of Representatives Nancy Pelosi launched an impeachment inquiry this week.
"The start of the impeachment inquiry adds a new element of uncertainties to markets, in addition to ongoing concerns about the US-China trade war and the risk of a US recession," said Norihiro Fujito, chief investment strategist at Tokyo-based financial firm Mitsubishi UFJ Morgan Stanley Securities.
"While no one thinks the Senate will vote for his impeachment given the Republican majority there, we could see more new revelations during a long investigation process," he added.
On trade issues, news headlines were too mixed for investors to show a clear reaction.
CNBC reported that trade war talks were scheduled in the second week of October in Washington, citing people familiar with the arrangements, and China's top diplomat said China was willing to buy more US products.
But other media reports on Thursday that the US is unlikely to allow American firms to supply China's Huawei undermined hopes of a complete deal between the countries.
“Technology is at the heart of the confrontations between the US and China. And the risk of sudden policy changes by the US administration is keeping markets on edge, even though the world's chip sales have clearly bottomed out," said Hiroshi Watanabe, economist at Sony Financial Holdings.