Asian stocks ended mixed in thin trade on Wednesday, with mainland Chinese and Hong Kong markets closed for the National Day holiday.
The United States has entered a federal government shutdown, the first in nearly seven years, after a stopgap funding bill failed.
The shutdown could delay crucial economic reports, including Friday's nonfarm payrolls data, which are vital for the Federal Reserve's interest-rate decisions.
Japanese markets ended sharply lower as the yen extended gains for a fourth straight session, pressured by the U.S. government shutdown and anxiety ahead of the leadership election for the ruling Liberal Democratic Party.
Sentiment was also dented by a survey that showed Japan's manufacturing activity shrank at the fastest pace in six months in September.
On the contrary, a central bank survey revealed that sentiment among Japan's large manufacturers improved for a second straight quarter.
The Nikkei average fell 0.85 percent to 44,850.85 while the broader Topix index settled 1.37 percent lower at 3,094.74.
Financial stocks paced the declines, with Dai-ichi Life Holdings and Mizuho Financial Group both tumbling around 4 percent.