Tokyo - Tokyo stocks slipped on Wednesday morning as the yen strengthened against the dollar following explosive accusations that US president Donald Trump tried to quash an FBI probe.
The embattled administration was facing claims late on Tuesday by recently fired FBI boss James Comey that Trump pressed him to drop a probe 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, raising more doubts about Trump's future and his ability to push through an economic agenda that include 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 97.63 points, to 19 822.19 by the lunch break, while the Topix index of all first-section issues was down 7.80 points, at 1 576.43.
In forex markets, the dollar weakened to ¥112.47, from ¥113.15 in New York.
A stronger yen is bad for Japanese shares as it hurts the profitability of the country's major exporters.
Toyota shares fell 1.26% to ¥6 015 while Panasonic was down 1.09% at ¥1 357.5 by the end of morning trade.
Banking giant Mitsubishi Financial Group slipped 0.58% to ¥715.5 and rival Mizuho dropped 2.17% to ¥198.7.
Toshiba rose 0.43% to ¥231 after diving more than 12% in the previous session in response to warnings that it likely lost more than $8.4bn in the past fiscal year.
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