TOKYO: Tokyo stocks ended lower on Wednesday as the yen strengthened against the dollar following explosive accusations that US President Donald Trump tried to quash an FBI probe.
The embattled administration is facing claims by recently fired FBI boss James Comey that the tycoon pressed him to drop an investigation into ex-national security advisor Michael Flynn over his links to Moscow.
The White House denied the claims, but it was the latest in a string of crises that have raised doubts about Trump's future and his ability to push through an economic agenda that includes tax cuts and big government spending.
"At the very least the view is that Trump's economic policies will be delayed over this, and the dollar is being sold," Tomoichiro Kubota, an analyst at Matsui Securities in Tokyo, told Bloomberg News.
"At the moment there's a strong sense of investors trying to gauge how far this will go. It's a situation where you can't completely rule out the possibility of impeachment down the road, so it's difficult for investors to buy."
Tokyo's benchmark Nikkei 225 index fell 0.53 percent, or 104.94 points, to 19,814.88, while the Topix index of all first-section issues was down 0.53 percent, or 8.41 points, at 1,575.82.
The dollar weakened to 112.31 yen, from 113.15 yen in New York.
A stronger yen is bad for Japanese shares as it hurts the profitability of the country's major exporters.
Toyota fell 0.97 percent to 6,034 yen while Panasonic was down 1.20 percent at 1,356 yen.
Banking giant Mitsubishi Financial Group slipped 1.42 percent to 709.5 yen and rival Mizuho dropped 2.51 percent to 198 yen.
Toshiba, however, ticked up 0.13 percent to 230.3 yen after diving more than 12 percent in the previous session in response to warnings that it likely lost more than $8.4 billion in the past fiscal year.