In another night of drama in Westminster, MPs voted against leaving the European Union without a deal, having rejected Prime Minister Theresa May's agreement with the bloc for a second time.
The move sent the pound soaring to highs not seen since June, with most observers warning that a no-deal divorce would hammer the British economy.
However, the currency retreated from those highs in Asia, with lawmakers due to vote on whether to extend the March 29 deadline for leaving.
May has warned that if MPs do not adopt her pact there could be a lengthy delay to Brexit that would see Britain taking part in European Parliament in elections in May.
"The Brexit soap opera continued with ... parliament voting, as expected, against leaving the European Union without a deal," said Jeffrey Halley, senior market analyst at OANDA. "Sterling inevitably rose overnight as traders piled into the hope-vs-reality trade."
But he added: "Being irrationally exuberant on the pound could be a dangerous trade at these lofty levels in the short-term.
"No one has actually asked the Europeans what they want, and they may yet impose potentially unpalatable conditions as the price of an (exit) extension."
- Trump's trade deal optimism -
On equity markets Shanghai sank 1.2 percent in the morning session after figures showed factory output grew slower than forecast in the first two months of the year, while retail sales and investment were broadly in line with expectations.
The tepid readings highlighted weakness in the world's number two economy and reinforced the need for measures by the government to kickstart growth as the global economy stutters and the US trade war drags on.
The "data means the economy will take a longer time to bottom out as industrial production and consumption are still under pressure despite the rebound in investment", Liu Peiqian, Asia strategist at Natwest Markets PLC, told Bloomberg News.
Traders will be keeping a close eye on closing remarks at the annual National People's Congress on Friday for an idea about leaders' plans.
Elsewhere, Sydney and Singapore were also in negative territory, though Tokyo went into the break 0.7 percent higher and Hong Kong edged up 0.1 percent. Seoul, Taipei and Wellington were also slightly higher.
Wall Street had provided a positive lead after data showed a pick-up in the US manufacturing sector, while a soft reading on wholesale inflation reinforced expectations the Federal Reserve will not hike interest rates any time soon.
With few major catalysts for buying dealers are awaiting fresh developments in the China-US trade talks with President Donald Trump saying he saw a "very good chance" of a deal but added he was in "no rush. I want the deal to be right".