Despite expectations that a deficit-cutting deal will be made between the White House, Democrats and Republicans, lawmakers have yet to agree a plan with the date on which the government runs out of money fast approaching.
Tokyo slipped 0.56 per cent by the break as yen hit new four-week highs, which cancelled out gains from another set of strong earnings reports.
Hong Kong fell 0.19 per cent and Sydney gave up 0.45 per cent while Shanghai dipped 0.12 per cent and Seoul shed 0.15 per cent.
The losses follow falls on Wall Street, where the Dow dropped 0.73 per cent, the S&P 500 shed 0.41 per cent and the Nasdaq was 0.10 per cent lower.
Politicians on both side clashed Tuesday but were unable to break an impasse that could see the world's richest nation unable to repay its debts, which could have a potentially devastating effect on the global economy.
President Barack Obama has described such a scenario as economic "Armageddon".
Top Senate Democrats and Republicans have called for a compromise even as Republican House Speaker John Boehner struggled to get his party fully behind a plan to raise the $14.3 trillion US debt limit.
But analysts said most dealers see the face-off as political posturing ahead of next year's presidential election and expect the debt ceiling to be raised in time to avoid a default.
"While markets have drifted lower, people do think that sanity will prevail in regard to the US debt ceiling," said Justin Gallagher, RBS head of domestic sales trading in Australia.
"That said, there seems to be more concern each day that the US could do something completely stupid," he told Dow Jones Newswires.
However, even if a default is averted, investors are concerned that the standoff may lead to a downgrade of the United States' top-notch credit rating for the first time in the country's history.
The row has dented the dollar, which tumbled against the yen and euro.
The European single unit briefly topped $1.4530 to hit its highest level since early July before easing slightly to $1.4525 in Tokyo late morning trade.
The euro was changing hands at $1.4516 late Tuesday in New York where the single European currency had gained nearly one per cent against the greenback.
The dollar bought 77.90 yen in Tokyo, compared with 77.94 yen in New York, at one point falling to a fresh four-month low of 77.82. The euro traded at 113.15 yen against 113.00 in New York.
And the Australian dollar jumped to a record high above US$1.10 after data showed inflation in Australia hit 0.9 per cent in the June quarter and 3.6 per cent over the year.
Those figures compared with expectations of a 0.8 per cent over the quarter and 3.5 per cent over the year.
New York's main contract, light sweet crude for September delivery fell 34 cents to $99.25 a barrel and Brent North Sea crude for September delivery rose 17 cents to $118.45.
Gold opened in Hong Kong at $1,622.40-$1,623.40 an ounce, up from Tuesday's finish of $1,611.00-$1,612.00.
What the stars mean:
★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional