Asian stocks fall amid concern about future of Donald Trump

Pedestrians are reflected on an electronic board showing Japan's Nikkei average the Dow Jones average and the stock averages of other countries outside a brokerage in Tokyo

Wall Street stocks were in the red all day as reports that Mr Trump asked former Federal Bureau of Investigation chief James Comey to stop a probe into ex-national security advisor Michael Flynn over his contacts with Russian Federation stoked questions about how an embattled White House will advance tax cuts and other growth measures that have boosted stocks.

Spreadbetters expected European stocks to follow suit, forecasting a lower open for Britain's FTSE, Germany's DAX and France's CAC. In fact, the broadest index of Asia-Pacific shares outside Japan- MSCI's broadest index reduced by 0.3 percent and Japan's own index Nikkei i.e. N225 declined by 0.5 percent.

The dollar index reached its lowest level since early November, having shed 2.2 percent in the past four sessions. Europe is set to follow with index futures pointing to a mixed start.ffic1 "We are approaching a short-term resistance as the breadth of this rise is very unhealthy and the market momentum looks exhausted", said Alex Wong, a fund manager at Ample Capital Ltd in Hong Kong, with about $130 million under management.

The allegations surrounding Trump have not only thrown doubt over the future of the pro-growth policies he promised, but have raised the possibility he could end up leaving the White House prematurely. [O/R] USA crude CLc1 was effectively flat at $49.04 a barrel.Gold hovered near a two-week high thanks to the weaker dollar and the risk aversion gripping the broader markets.

It pulled out of a dive that had taken it to its lowest level in six months against other top currencies including the euro and the yen. South Korea's Kospi dipped 0.1 percent to 2,293.08.

"The appointment appears to be an attempt at tackling the problem early".

While the tycoon says he will be exonerated by a newly appointed special prosecutor who will look into the claims, analysts said the uncertainty is rocking markets globally.

Tokyo plunged 1.3 percent, with investors brushing off data showing Japan's economy posted another quarterly rise in growth, marking its longest expansion in more than a decade.

The euro climbed above US$1.11 overnight and hit US$1.1129, its highest level since Nov 9. "We are already well positioned, but we need to think about a more negative scenario re tax reform versus what we were previously thinking", said Edward Perkin, chief equity investment officer at Eaton Vance.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, fell 0.13% to 97.97.

The yield on 10-year Treasuries rose one basis point, after dropped 10 basis points on Wednesday to 2.23 per cent, the lowest since April 19.

With Treasury yields falling the gap between United States and German government debt yields reached its narrowest in more than six months on Wednesday as a tumultuous week in Washington contrasted with a sense of improved political stability in Europe.

Oil prices extended losses after API data showed an unexpected build in US crude inventories. An ongoing effort by OPEC to cut production has partially propped up oil but prices remain under pressure from still plentiful supplies. The U.S. Energy Information Administration said U.S. crude inventories fell 1.8 million barrels for the week to May 12, less than the 2.4 million barrels that had been forecast.

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