The House of Representatives Majority Whip Kevin McCarthy said the House wouldn't vote on the plan to raise the federal borrowing limit as scheduled, but didn't say whether the House would take it up on Friday.
The proposal is a bid by Speaker John Boehner to stem revolt from conservative Republican members five days before a possible U.S. default.
"Unfortunately the situation in the U.S. is deteriorating, with clear signs of cracks within the Republicans," says CMC Markets chief market strategist, Michael McCarthy, noting that unless the resolution is a best-case scenario, with significant spending cuts and increased tax revenues, the U.S. is likely to lose its triple-A rating.
Japan's Nikkei Stock Average fell 0.6%, Australia's S&P/ASX 200 was down 0.8% at 4429.50 after hitting 4421.20, South Korea's Kospi Composite fell 0.7%, China's Shanghai Composite Index fell 0.5%, Hong Kong's Hang Seng Index was down 0.7% and India's Sensex rose 0.6%.
Dow Jones Industrial Average futures were 62 points lower in screen trade.
Tokyo, which was resilient through the morning, fell sharply on news of the vote cancellation. Earnings disappointments and weaker-than-expected June industrial production data also weighed on shares.
The June data rose 3.9% on-month, compared with the 4.3% rise expected, but it showed the manufacturing sector is recovering quickly from the March earthquake.
Nintendo plunged 20% in Osaka trade after the company Thursday reported weaker-than-expected fiscal first-quarter results and sharply lowered its full-year forecasts and the price of its 3DS handheld games console.
Sony shed 2.8% after saying Thursday it swung to a net loss in the fiscal first quarter and lowered its full-year earnings forecast.
In Seoul, Samsung Electronics added 1.1% despite reporting before the market open that second-quarter net profit fell 18% on year as the result was in line with forecasts and as the third quarter is expected to show improvement.
In Sydney, resources underperformed the broader market, with BHP Billiton down 1.5% and Rio Tinto off 1.6%.
In foreign-exchange markets, the dollar fell to a fresh four-month low of 77.48 against the yen amid a growing risk of U.S. sovereign debt downgrade.
The dollar was recently at ¥77.50 from ¥77.65 late Thursday in New York trade. The euro was at $1.4340 from $1.4330, and at ¥111.15 against the yen from ¥111.29.
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