Asian shares fell on Wednesday, taking their cues from Wall Street with investor enthusiasm toward US tax changes ebbing as the long-awaited reform bill wound its way through Congress, while higher US Treasury yields underpinned the dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2 per cent in early trading, while Japan's Nikkei stock index also edged down 0.2 per cent. The Dow Jones Industrial Average shed 0.15 per cent, the S&P 500 lost 0.32 per cent, and the Nasdaq Composite dropped 0.44 per cent on Tuesday.

The US House of Representatives initially passed the tax legislation in a Tuesday afternoon vote, but the bill included provisions that did not comply with Senate rules. The Senate was expected to vote on a revised version of the bill, with the offending provisions removed. If the Senate approves the bill as expected, the House will vote again on Wednesday.

The bill slashes the corporate income tax rate to 21 per cent from 35 per cent. That would boost overall earnings for S&P 500 companies by 9.1 per cent, according to UBS equity strategists, though some investors said those expectations are already reflected in recent stock market gains to record highs.

Congress is also struggling to pass a temporary spending bill by midnight on Friday to fund the government and avert a partial shutdown. “We need to confirm the passage of the tax bill, and the avoidance of a shutdown by Friday, and these two things are necessary before the dollar can move higher, as the market waits for these developments,” said Masafumi Yamamoto, chief currency strategist for Mizuho Securities in Tokyo.

Higher US Treasury yields bolstered the greenback, with the benchmark 10-year yield notching a seven-week high of 2.472 per cent. It last stood at 2.451 per cent in Asian trading, compared to its US close on Tuesday of 2.463 per cent.

The dollar edged up 112.99 yen, while the euro got a lift from higher eurozone rates, gaining 0.5 per cent on Tuesday. The European currency was steady at $1.1839. Central bank governors of Estonia, Slovakia and Germany all discussed on Tuesday the need to shift the debate from bond purchases to other tools such as interest rates. “That's re-igniting the debate about ECB tightening, so despite the outlook for the U.S. tax bill passage, euro-dollar is strong right now,” Yamamoto said.

Against a basket of six rival currencies, the dollar was slightly higher on the day at 93.464. Bitcoin was down 10 per cent on the Bitstamp exchange at $16,102.06.

US crude oil futures extended gains, helped by a North Sea pipeline outage, OPEC-led supply cuts and expectations that US crude inventories had fallen for a fifth week. US crude was up 0.2 per cent, or 12 cents, at $57.68 a barrel, after settling up 0.5 per cent on Tuesday. Brent crude had yet to traded after gaining 0.6 per cent to $63.80 overnight.

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