The dollar rose against major peers, led by a 0.3 per cent advance versus the yen, sterling lost 0.23 per cent, the risk-sensitive Aussie dollar weakened 0.22 per cent and the euro was flat

Asian stocks dropped and the dollar gained on Wednesday after blasts in Poland that Ukraine and Polish authorities said were caused by Russian-made missiles.

The potential for a further ratcheting up of geopolitical tensions saw MSCI’s broadest index of Asia-Pacific shares outside Japan lose 0.6 per cent.

Australian shares fell 0.5 per cent, while Japan’s Nikkei stock index dropped 0.76 per cent. Hong Kong’s Hang Seng Index was flat, while China’s CSI 300 lost 0.3 per cent.

U.S. stock futures, the S&P 500 e-minis shed 0.4 per cent.

NATO member Poland said on Wednesday that a Russian-made rocket killed two people in eastern Poland near Ukraine, and it summoned Russia’s ambassador to Warsaw for an explanation after Moscow denied it was responsible.

(It) interrupted what is a far more constructive tone in markets over the last three, four days, said Dwyfor Evans, head of Asia Pacific macro strategy at State Street Global Markets in Hong Kong, noting there has been optimism in financial markets that U.S. inflation was cooling.

The dollar rose against major peers, led by a 0.3 per cent advance versus the yen. Sterling lost 0.23 per cent while the risk-sensitive Aussie dollar weakened 0.22 per cent. The euro was flat.

The yield on benchmark 10-year Treasury notes slipped to 3.7622 per cent in Tokyo, compared with 3.799 per cent at the close of U.S. trading on Tuesday. It earlier fell as low as 3.757 per cent, matching the previous session’s intraday trough, which was the lowest level since Oct. 6.

U.S. crude ticked up 0.18 per cent to $87.08 a barrel, bolstered by news that oil supply to Hungary via the Druzhba oil pipeline has been temporarily suspended due to a fall in pressure.