Asian markets retreated Wednesday on fears about an expected US interest rate rise this year, while the pound recovered after suffering a series of losses fuelled by worries over Britain's EU exit.

Samsung Electronics suffered another bout of selling in the morning after announcing Tuesday it would scrap the troubled flagship Galaxy Note 7 over an exploding battery crisis.

Shares later staged a partial recovery to end around 10 percent down so far this week.

The regional retreat follows sharp falls on Wall Street, where investors were spooked by below-forecast earnings from aluminium-maker Alcoa. The figure raised concerns about the state of corporate America going into the reporting season.

Markets are keenly awaiting the release of minutes from the Federal Reserve September policy meeting, hoping for a clue about the bank's plans for raising borrowing costs.

A string of recent upbeat data on the world's top economy, and increasingly positive comments from Fed boss Janet Yellen, have fuelled speculation rates will rise by year-end.

"Stock markets are becoming nervous about the prospect of rising interest rates against a background of moderate profit growth and relatively high valuations," Ric Spooner, chief market analyst in Sydney at CMC Markets, said in an email.

"Given how critical the interest rate outlook is at the moment, markets will be focused on the degree of support for a rate hike this year revealed in the Fed minutes," he said, according to Bloomberg News.

- Pound bounces -

Tokyo ended 1.1 percent lower, while Hong Kong -- where monetary policy is tied to that of the United States -- was off one percent in late trade.

Shanghai slipped 0.2 percent, Sydney was off 0.1 percent and Singapore shed 1.1 percent.

Bangkok dived 2.5 percent in the afternoon. The index has lost almost seven percent this week on worries about the health of King Bhumibol Adulyadej, with many fearing economic instability after his death.

The prospect of a US rate rise has bolstered the dollar in recent weeks. The pound has taken a particular hiding as Britain's leaders bicker over how to leave the EU, with many fearing a "hard Brexit" with no access to the single market after leaving.

Sterling has lost nearly 18 percent to sit at 31-year lows against the greenback since British voters narrowly approved Brexit in a referendum in June.

However, it edged up Wednesday after Prime Minister Theresa May acknowledged that parliament should be allowed to vote on the country's plans for leaving, an idea she had previously dismissed. The news raised hopes London could agree to negotiate better post-Brexit terms.

The pound rose to $1.2297 from $1.2257 in New York, while the euro slipped to 89.99 pence from 91.15 pence.

In Seoul, the KOSPI edged up 0.1 percent as market heavyweight Samsung Electronics recovered from a two percent early loss to end just 0.7 percent lower.

The South Korean giant plummeted 1.5 percent Monday and more than eight percent Tuesday after it stopped production of the Note 7 and warned previous purchasers to stop using it.

After the close of trade it then announced it was scrapping the model completely.

The announcements came a little over a month after Samsung announced a recall of 2.5 million Note 7s following complaints that its lithium-ion battery could catch fire.

- Key figures around 0700 GMT -

Tokyo - Nikkei 225: DOWN 1.1 percent at 16,840.00 (close)

Hong Kong - Hang Seng: DOWN 1.0 percent at 23,310.76

Shanghai - Composite: DOWN 0.2 percent at 3,058.50 (close)

Pound/dollar: UP at $1.2297 from $1.2257

Euro/pound: DOWN at 89.99 pence from 91.15 pence

Euro/dollar: DOWN at $1.1052 from $1.1056

Dollar/yen: UP at 103.60 yen from 103.48 yen

Oil - West Texas Intermediate: UP 16 cents at $50.95 per barrel

Oil - Brent North Sea: UP 23 cents at $52.64

New York - DOW: DOWN 1.1 percent at 18,128.66 (close)

London - FTSE 100: DOWN 0.4 percent at 7,070.88 (close)