The Nikkei Stock Average NIK, -0.79% reversed gains in afternoon trade, and was last down 0.7%. Elsewhere, Australia’s S&P/ASX 200 XJO, -0.80% was off 0.8%, while Korea’s SEU, -0.18% declined 0.8%.
Trump plans to hold a news conference on Wednesday, but already, market participants fear a wave of comments criticizing Asian manufacturers could jeopardize prospects in the region.
“The market is a little bit nervous,” said Shusuke Yamada, chief Japan forex strategist at Bank of America Merrill Lynch.
The political uncertainty likely pushed the safe-haven yen higher, with profit-taking pressure in the U.S. dollar weighing on the greenback, he said. The fear among investors in Japan is that Mr. Trump could turn on the country in his desire to protect American manufacturing.
The dollar-yen pair USDJPY, +0.16% was last down 0.5% at ¥115.47, after earlier hitting a low of ¥115.18. This followed a large amount of dollar selling seen at around the ¥116 level, say analysts.
A stronger yen makes Japanese products more expensive abroad, hurting shares of key exporters. Among those, Mitsubishi Motors 7211, -2.57% was down 2.1%, while Mazda Motor 7261, -1.41% dropped 1.3% and Toyota Motor TM, -0.32% 7203, -1.00% fell 0.5%.
Elsewhere in the region, shares in Australia took profit after the benchmark index there hit a 20-month high on Monday. Trading sentiment was hurt as latest data showed that the country’s economy contracted in the third quarter and for the first time since early 2011.
Retail sales there rose much less than expected in November, despite record low interest rates. November’s sales rose just 0.2% from the previous month, and half the increase expected by economists.
Oil stocks were among the key decliners in Australia, with Santos Ltd. STO, -1.65% down 2% with Oil Search OSH, -1.34% dropping 1.6%, following the overnight drop in oil prices.
Oil futures notched their biggest dollar decline in six months on Monday, after Iraq reported record export shipments for December, raising doubts about how much of the agreed-to production cuts will actually occur.
The $55-a-barrel level for oil “has been hard to clear as traders are well aware that such prices incentivize U.S. shale producers,” which have cooled output amid the crude price slump, said Gary Huxtable, a client advisor at Atlantic Pacific Securities.
Crude oil futures CLH7, +0.25% recovered slightly in Asian trade Tuesday, with Brent LCOH7, +0.29% , the international benchmark, up 4 cents to $54.98 a barrel.
Still on tap for Tuesday afternoon is a consumer-confidence reading in Japan for December. Prime Minister Shinzo Abe’s attempt to pull the economy out of deflation hinges on encouraging its people to spend.
Elsewhere, Hong Kong’s Hang Seng Index HSI, +0.83% was up 0.6%, while the Shanghai Composite Index SHCOMP, -0.30% fell 0.1%, as consumer inflation slowed in December but producer-price growth quickened at a pace much faster than economists’ expectations.
— Rachel Pannett and Hiroyuki Kachi contributed to this article.