Asia markets took "sell in May" sentiment to heart on Monday, with the Japanese benchmark index tumbling over 3 percent and Australian bank shares selling off.
The Nikkei 225 closed down 518.67 points, or 3.11 percent, at 16,147.38, after initially tumbling as much as 4.14 percent in early trade. On Thursday, the benchmark index shed 3.61 percent, after the Bank of Japan surprised markets by standing pat on its monetary policy.
In South Korea, the Kospi ended down 16 points, or 0.80 percent at 1,978.15. Down Under, the ASX 200 retraced most of its morning losses of over 1 percent to close down 9.21 points, or 0.18 percent, at 5,243.00, with the heavily-weighted financials sub-index finishing down 1.56 percent.
Markets in China, Hong Kong, Taiwan, Singapore and Malaysia are closed for a public holiday.
Japan's market turmoil may be spreading around the region, analysts said.
"While lingering disappointment from the Bank of Japan's inaction continues to weigh in Japanese markets, negative sentiment started filtering through to other global markets and this ripple effect should be closely monitored as the negative impact from waning global risk sentiment could add more fuel to an already overheated yen," Stephen Innes, senior trader at OANDA, said in a note Monday. He expects the yen may strengthen further.
Major Japanese exporters sold off sharply, with shares of Toyota closing down 3.75 percent, Nissan down 4.95 percent and Honda off 3.98 percent in the wake of a stronger yen, which is usually negative for exporters as it makes their products less competitive overseas and decreases their overseas profits when converted back into the Japanese currency.