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Asian shares gained on Wednesday after Wall Street managed to weather a fresh twist in the controversy over U.S. President Donald Trump's alleged connection with Russia, while investors looked ahead to Federal Reserve Chair Janet Yellen's comments.
MSCI's broadest index of Asia-Pacific shares outside Japan ticked up 0.3 percent. Japan's yen-sensitive Nikkei slid 0.4 percent on the yen's gains but MSCI's dollar-denominated Japan index gained 0.5 percent.
European shares are expected to rise, with spread-betters looking to gains of 0.3 percent in Germany's DAX and Britain's FTSE, and a 0.2 percent rise in France's CAC at the opening.
U.S. stocks took a brief tumble after emails disclosed Trump's eldest son welcomed help from a Russian lawyer for his father's 2016 election campaign against Hillary Clinton.
But by the closing bell, Wall Street shares had clawed back their losses.
"The e-mails look pretty bad but then again they don't look like decisive evidence (for illegal behavior) either. I doubt this alone would lead to a risk-off market," said Hiroko Iwaki, senior fixed income strategist at Mizuho Securities.
U.S. shares were helped in part as the Senate announced a two-week delay to its August recess to allow more time to tackle a measure that would repeal key parts of Obamacare, as well as pursue other legislative priorities.
Still, it remained unclear whether U.S. Senate Republicans have the votes to pass the measure or even what form it would finally take.
On the other hand, the dollar failed to recover after the damage suffered from the new twist in the Trump campaign's alleged links with Russia.
The euro vaulted to a 14-month high of $1.14895 in Asian trade.
The dollar also lost steam against the yen, which had been under renewed pressure following Friday's bond-buying by the Bank of Japan which highlighted divergent monetary polices between the two countries.
The U.S. currency dropped 0.4 percent to 113.46 yen, slipping from a four-month high of 114.495 yen touched on Tuesday.
The Canadian dollar stood at C$1.2907 per dollar, near Friday's 10-month peak of C$1.2860 as investors brace for a likely rate hike by the Bank of Canada, its first tightening since 2010, later in the day.
The move would make Canada the first to follow the U.S. Federal Reserve in removing the monetary stimulus poured into the global economy, with the European Central Bank and the Bank of England also seen moving in that direction in coming months.
The dollar's index against a basket of six major currencies was hovering at 95.58, just above its nine-month low of 95.47 plumbed at the end of June.
U.S. Treasuries yields stayed below their recent peaks, with the 10-year yield at 2.352 percent, compared with 2.398 percent marked on Friday, its loftiest level in almost two months.
Ahead of Fed Chair Yellen's testimony to Congress on the state of the U.S. economy from 1400 GMT, two of her colleagues cited low wage growth and muted inflation as reasons for caution on further interest rate increases.
Fed Governor Lael Brainard embraced the plan to reduce the balance sheet "soon," but suggested her support for any future rate increases will depend in part on how inflation shapes up.
Minneapolis Federal Reserve Bank President Neel Kashkari said he finds it hard to believe that the U.S. economy is in danger of overheating when wage growth is so low.
Traders trimmed expectations of a rate hike by the end of the year, with dollar interest rate futures pricing in about a 55 percent chance compared to about 60 percent earlier, while most investors expect the Fed to decide to start shrinking its balance sheet in September.
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