TOKYO, Dec 26 - Global stock markets headed into the year-end under a heavy cloud after another rout this week as U.S. political uncertainty added to heightened concerns over slowing global economic growth. Asian equities were shaky on Wednesday following a Christmas eve Wall Street plunge, as investors were unnerved by U.S. political developments including a U.S. federal government shutdown and President Donald Trump's hostile stance towards the Federal Reserve chairman.
U.S. Treasury Secretary Steven Mnuchin had also raised market concerns by convening a crisis group amid the pullback in stocks.
S&P 500 emini futures moved in and out of the red and were last down 0.1 percent, pointing towards a subdued start for Wall Street when the U.S. market reopens after Christmas Day, when many of the world's financial markets were shut.
MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.15 percent.
The Shanghai Composite Index inched down 0.1 percent while South Korea's KOSPI shed more than 1 percent.
Japan's Nikkei bounced 0.75 percent after diving 5 percent the previous day to a 20-month low and slipping into bear market territory.
"In addition to concerns towards the U.S. economy, the markets are now having to grapple with growing turmoil in the White House which has raised political risk ahead of the year-end," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
U.S. stocks have dropped sharply in recent weeks on concerns over weaker economic growth. Trump has largely laid the blame for economic headwinds on the Fed, openly criticizing its chairman, Jerome Powell, whom he appointed.
That has further rattled investors as they grappled with fears of slowing global growth, corporate earnings and U.S.-China trade tensions.
In an effort to reassure investors, Treasury Secretary Mnuchin spoke on Sunday with the heads of the six largest U.S. banks, who confirmed they have enough liquidity to continue lending and that "the markets continue to function properly."
U.S. bond yields have declined as the market rout, including a steep sell-off in oil, prompted investors to move into safe-haven government debt, adding to the growing pressure on the dollar.
The dollar traded at 110.44 yen after retreating to a four-month low of 110.00 overnight against its Japanese peer, which tends to attract demand as a perceived safe-haven during times of market volatility and economic stress.
The euro was 0.2 percent higher at $1.1412.
The 10-year U.S. Treasury note yield stood at 2.745 percent following a descent on Monday to 2.733 percent, its lowest since early April.
In commodities, U.S. crude futures were up 0.95 percent at $42.94 per barrel after tumbling 6.7 percent on Monday.
U.S. crude futures plunged to the lowest level since June 2017 on Monday, as bearish stocks added to fears of an economic slowdown.
Brent crude futures were down 0.35 percent at $50.29 a barrel, having skidded 6.2 percent in the previous session to their weakest since August 2017.Safe-haven gold was well bid, with spot prices brushing a six-month peak of $1,272.11 per ounce.