The dollar has struggled this year, but some strategists say the currency could rise as the Federal Reserve signals further interest rate hikes.
Japan's Nikkei 225 closed the session with 0.4 percent loss to ¥20,098 and TOPIX also fell 0.4 percent to ¥1,653.9.
As the US economy is back on track for steady growth, Fed policymakers are preparing to unwind its crisis-era policies to avoid igniting inflation pressures or pumping up asset bubbles.
The Final Word: Volatility spiked through the morning session after Donald Trump Jr. released emails that pointed to Russian collusion in the presidential election.
Yellen did discuss the Federal Reserve's massive $4.4 trillion balance sheet, or at least the normalization plans, noting that the Fed now sees lowering reserve balances appreciably lower than recent levels - but keeping reserves at a level much higher than what was held prior to and going into the last financial crisis. However, Thin noted the market is pricing in a 40 percent chance of another interest rate hike by year's end, and "in between, we are probably going to see some balance sheet tapering".
NWS: Torrential rain could bring flash floods
Downpours could lead to flash flooding, especially in urban, poor-drainage and low-lying areas, according to the watch. Madison had plenty of rain Wednesday morning, but only seven-tenths of an inch was recorded at the airport.
The response on Wall Street underscores how much investors are paying attention to the political turmoil in Washington.
"Because the neutral rate is now quite low by historical standards, the federal funds rate would not have to rise all that much further to get to a neutral policy stance", Yellen said in prepared remarks.
The currencies of South Korea, Taiwan and Thailand all posted their biggest intraday percentage gains in at least a month as investors pared their greenback positions, although the Philippine peso hovered just above a record low it hit on Tuesday on concerns about the country's trade deficit. The euro was 0.3 percent higher at 130.20 yen, after rising as high as 130.275 yen, its highest since February 2016.
Benchmark 10-year Treasury yields rose to 2.383 percent from 2.371 percent late on Monday.
Minneapolis Federal Reserve Bank President Neel Kashkari expressed his uncertainty over the possibility of the United States economy to overheat when wage growth is very low. Most sectors finished mixed-to-lower, with telecommunications services and financials leading the decline.
Interest rates are on the rise globally as the Fed is expected to tighten further this year, the Bank of Canada will likely raise rates this week, while comments suggest tighter European Central Bank policy and chatter from the Bank of England.
The rupee today retreated from two- week high levels against the U.S. currency and ended lower by 6 paise at 64.59 on fresh bouts of dollar demand amid Fed rate hike rhetoric.