Asian shares fall on worries about Pelosi's visit to Taiwan

TOKYO (AP) — Asian shares were mostly lower Tuesday amid concerns about regional stability as an expected visit by U.S. House Speaker Nancy Pelosi to Taiwan prompted threats from Beijing.

Benchmarks headed downward across the board in the region in early trading, including Japan, China, South Korea and Australia.

China sees Taiwan as its own territory and has repeatedly warned of “serious consequences” if the reported trip to the island democracy goes ahead. Pelosi has said she is visiting Singapore, Malaysia, South Korea and Japan for talks on a variety of topics, including trade, COVID-19, climate change and security.

While there have been no official announcements, local media in Taiwan reported Pelosi will arrive Tuesday night, making her the highest-ranking elected U.S. official to visit in more than 25 years.

“Risk sentiment took a hit following reports suggesting U.S. House Speaker Pelosi is to go ahead with her visit to Taiwan. Investors are likely to be looking for defensive positions as the geopolitical situation could escalate over the next few days,” said Anderson Alves of ActivTrades.

Japan's benchmark Nikkei 225 declined 1.4% to 27,594.73. South Korea's Kospi slipped 0.5% to 2,439.62. Hong Kong's Hang Seng dropped 2.5% to 19,675.87, while the Shanghai Composite dove 2.3% to 3,186.27.

“The first big relief point will be Pelosi’s safe arrival in Taiwan, followed by her safe departure. No party wants a real war, but the risk of mishap or even aggressive war game escalation is real, which could always lead to a tactical mistake,” Stephen Innes, managing partner at SPI Asset Management said.

Australia’s S&P/ASX 200 edged 0.1% higher to 6,998.10.

The Reserve Bank of Australia on Tuesday boosted its benchmark interest rate for a fourth consecutive month to...