Asian equity markets tracked Wall Street's fall on Tuesday on concerns when the Federal Reserve might start to pare back its asset purchases.
In emerging markets, Indonesia's Jakarta Composite fell 4.5 percent to officially enter bear market territory, having lost 22 percent from May's all-time record high. Meanwhile, Thailand's benchmark SET Index lost nearly 3 percent.
(Read more: Which emerging market stocks have it the worst?)
Nikkei drops 2.6%
Japan's benchmark index dropped to its lowest level since June 28 as key exporters got dragged down from the sell-off in emerging markets.
Automakers with exposure to emerging economies weighed on the index. Hino Motors and Suzuki Motor led losses by 8 percent each while truck maker Isuzu Motors fell 7 percent and Honda Motor lost 4 percent.
(Read more: Territorial disputes– can Japan afford them?)
Kospi slides 1.5%
South Korea's benchmark index reversed earlier gains to track Asia-wide declines, falling to its lowest level since August 12.
Exporters were hit from a slightly weaker Japanese yen, which hurts their competition advantage in overseas markets. Technology stocks fell with Samsung Electronics down 1.3 percent while LG Electronics fell 3 percent.
Growth-sensitive cyclical stocks such as chemical producers led the losses. Lotte Chemical and Lotte Chemical eased over 1 percent each.
Shares of Hyundai Motor and Kia Motors lost 2 percent each after Hyundai's workers announced they plan to go on strike this week, after negotiations with management over wages and benefits yielded no results.
Sydney 0.7% lower
Australia's share market traded at its lowest level since August 12 as investors digested weak corporate results in what some analysts called the biggest day on the earnings calendar.
The nation's biggest insurer, QBE Insurance fell 5.5 percent after posting a 37 percent fall in half-year net profit while mining contractor Macmahon Holdings skidded over 17 percent after announcing a bigger-than-expected full-year net loss. Coca-Cola Amatil posted first-half profit that missed analyst estimates; shares fell 5.5 percent.
On the bright side, iron ore and steel producer Arrium surged nearly 17 percent despite its full-year profit tumbling 14 percent.
The index was little changed after the minutes of the Reserve Bank of Australia's (RBA) latest policy meeting suggested that future rates cuts were possible, but not imminent. The central bank also said the Aussie dollar had more room to fall, which saw the currency fall below the $0.91 handle.
Shanghai eases 0.6%
China's benchmark index managed to avoid the rest of Asia's sharp losses as confidence rose after the central bank governor pledged more financial support for the economy and said that policy could be fine-tuned in the second-half of this year.
"We continue to expect further targeted stimulus measures and a 7.7 percent GDP growth this year," wrote analysts at Credit Agricole in a note.
Railway stocks rallied after Beijing pledged more investment in the sector. Daqin Railway climbed 4.5 percent while China Railway Construction rose 1.6 percent.
(Read more: Made in China: Can China build an Apple or Ikea?)
Meanwhile, shares of Everbright Securities dropped the maximum trading limit of 10 percent as it resumed trade in Shanghai for the fist time since Friday, when a trading error caused a 5.6 percent spike in the benchmark index.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC