In the US, underperforming corporate earnings, as well as fears that bickering among Republicans would derail Mr Trump’s tax reform plans, weighed on investor sentiment.
Mr Trump has struggled to marshall the 51 votes he needs to pass his proposal, as critics within his own party have lambasted his combative behaviour.
With 52 Republican senators, more than one defection would cripple his reform bid, forcing him to seek support from Democrats who have attacked his plan, calling it a giveaway to the rich.
“Republican infighting once again threatens to derail the vote,” said Stephen Innes, head of Asia-Pacific trading at Oanda.
“Uncertainty over the next Fed Chair has traders double and even triple guessing their best-educated guess. Indeed, the agonising wait is taking its toll on positioning as the longer the process gets drawn out, the more nervous the market becomes”, Innes added