Tokyo, Sep 3 (AP) Asian shares declined Wednesday, echoing a fall on Wall Street, as political uncertainty took centrestage in Japan, making for cautious trading on the Tokyo Stock Exchange.

Japan's benchmark Nikkei 225 shed 0.2 per cent in morning trading to 42,222.36.

The fate of Japanese Prime Minister Shigeru Ishiba has been uncertain for weeks, with calls growing both for him to resign and to remain, after a recent election defeat and the rise of fringe parties have shaken public faith in the ruling Liberal Democratic Party. Confidence was rocked further by a recent comment from Ishiba's ally, Hiroshi Moriyama, who said he was stepping down as party secretary general.

“The political tremor is domestic, with Prime Minister Ishiba's key power broker signalling his resignation, shaking the foundations of the ruling party,” said Stephen Innes, managing partner at SPI Asset Management.

Australia's S&P/ASX200 slipped 1.1 per cent to 8,800.60. South Korea's Kospi edged up 0.3 per cent to 3,181.37. Hong Kong's Hang Seng lost 0.2 per cent to 25,438.60. The Shanghai Composite shed nearly 1.0 per cent to 3,821.62.

On Wall Street, the S&P 500 fell 0.7 per cent for its worst day in a month after paring a loss that earlier reached 1.5 per cent. The Dow Jones Industrial Average dropped 249 points, or 0.5 per cent, and the Nasdaq composite lost 0.8 per cent. All three are still relatively close to their recently set all-time highs.

Big Tech companies led the market lower. They've been soaring for years on expectations that they'll continue to dominate the economy, but they have also shot so high that critics say their prices have become too expensive.

Nvidia, whose chips are powering much of the world's move into artificial-intelligence technology, fell 2 per cent and was the single strongest force pulling the S&P 500 downward. Amazon sank 1.6 per cent, and Apple dropped 1 per cent.

The overall stock market felt pressure from rising yields in the bond market, where the 10-year Treasury yield climbed to 4.27 per cent from 4.23 per cent late Friday. When bonds are paying more in interest, investors are less willing to pay high prices for stocks.

Longer-term bond yields are on the rise around the world, in part because of worries about how difficult it will be for governments to repay their growing mountains of debt.

In the United States, longer-term Treasury yields are feeling additional pressure from President Donald Trump's attacks on the Federal Reserve for not cutting interest rates sooner. The fear is that a less independent Fed will be less likely to make the unpopular decisions needed to keep inflation under control over the long term, such as keeping short-term rates higher than investors would like.

Tuesday was also the first opportunity for trading after a federal appeals court ruled late Friday that Trump overstepped his legal authority when announcing sweeping tariffs on almost every country, though it left the tariffs in place for now.

Trump's tariffs have created confusion across the global economy and may have hurt the U.S. job market. But less income from them could also force the US government to borrow more to pay its bills, according to Scott Wren, senior global market strategist at Wells Fargo Investment Institute.

In another signal of increasing worries in financial markets, the price of gold rose to touch another record. The metal has often provided a haven for investors in times of uncertainty.

Treasury yields briefly trimmed their gains after a report on Tuesday said US manufacturing shrank by more last month than economists expected. Many companies told the Institute for Supply Management that tariffs are continuing to make conditions chaotic.

“Too much uncertainty for us and our customers regarding tariffs and the US/global economy,” one company in the chemical products industry said, while noting that orders across most product lines have weakened.

The worse-than-expected data on manufacturing could give the Federal Reserve more leeway to cut its main interest rate for the first time this year at its next meeting in a couple of weeks. That's the widespread expectation among traders, though economic reports coming later this week could change things.

The highlight for the week is coming on Friday, when economists expect a report to show that US employers upped their hiring by a bit last month. Last month's weaker-than-expected jobs report raised worries about the economy and cranked up expectations for coming rate cuts by the Fed.

All told, the S&P 500 fell 44.72 points to 6,415.54. The Dow Jones Industrial Average dropped 249.07 to 45,295.81, and the Nasdaq composite sank 175.92 to 21,279.63.

In energy trading, benchmark US crude rose 2 cents to USD 65.61 a barrel. Brent crude, the international standard, fell 3 cents to USD 69.11 a barrel.

In currency trading, the US dollar edged up to 148.86 Japanese yen from 148.34 yen. The euro cost USD 1.1631, down from USD 1.1646. (AP) GSP

Executive authority over tariffs constrained by appeals court ruling, sparking market uncertainty and global yield rises. A federal appeals court found the President exceeded his authority in announcing broad tariffs, heightening uncertainty about trade policy and contributing to market volatility. The ruling-leaving tariffs intact for now-alongside political instability in Japan and rising sovereign bond yields, pressured regional equities and influenced investor expectations about monetary policy and fiscal borrowing needs.