Asian shares slumped on Tuesday after discouraging U.S. factory orders hit Wall Street and political ructions in Spain and Italy spurred profit-taking.
Japan's Nikkei share average dropped as fears about the debt crisis prompted investors to lock in gains following five straight days of upside.
The Nikkei fell 1.9 percent to 11,046.92, moving away from a 33-month closing high of 11,260.35 hit on Monday. The broader Topix fell 1.7 percent to 939.70.
With Japanese corporate earnings in full swing, investors carefully awaited bellwether earnings such as from Toyota Motor after the market close. Toyota raised its annual net profit forecast by more than 10 percent to 860 billion yen ($9.3 billion) on strong sales of the Camry sedan and other vehicles in its biggest market the United States, as well as the yen's drop.
Some companies disappointed the market, with Hitachi falling 6.4 percent as the industrial machinery firm sliced 13 percent off its full-year operating profit outlook, citing sluggish demand in Europe and a slowdown in emerging markets.
But Japan Airlines was in favor, jumping as much as 7.6 percent to its highest level since it went public last September, after the airline hiked its operating profit forecast by 12.7 percent to 186 billion yen ($2 billion) for the year to March 31.
South Korean shares traded lower, extending losses into a fourth day, while a stronger won pressured exporters.
SK Hynix, the world's second-largest memory chip-maker, fell 2.5 percent.
The Korea Composite Stock Price Index closed down 0.77 percent at 1,938.18 points, a two-month low.
Australian shares eased 0.5 percent, but the central bank's decision to keep interest rates on hold helped to trim losses.
Australia Leaves Interest Rates Unchanged at 3%
The S&P/ASX 200 index ended 24.8 points lower at 4,882.7 according to latest data. The benchmark index hit an intraday high of 4,951 but ended down 13.6 points at 4,907.5 on Monday.
Shares in Macquarie Group fell 4.1 percent after Australia's top investment bank forecast a smaller-than-expected 10 percent rise in 2013 profit.
New Zealand's benchmark NZX 50 index finished 34.5 points lower at 4,212.
Hong Kong shares posted their worst loss in three months, weighed by a 6.4 percent slide in China Petroleum and Chemical Corp (Sinopec) after a $3.1 billion new share placement.
The Hang Seng Index ended down 2.3 percent at 23,148.5, its worst single-day loss since November 8, unmoved by a rebound over the day in mainland shares. The China Enterprises Index of the top Chinese listings in Hong Kong shed 2.8 percent.
Sinopec shares in Hong Kong dived 6.4 percent to its lowest close since end-December but held above the HK$8.45 placement price, signalling robust demand for the 2.85 billion new shares. A source familiar with the matter said they were sold to a group of about 10 investors that included some of the world's largest institutional investors and global fund managers.
Meanwhile, China shares recouped midday losses to record a third-straight gain, with strength in property-related counters offsetting weakness in the financial and energy sectors.
The CSI300 of the top Shanghai and Shenzhen A-share listings closed up 0.9 percent at 2,771.7 points. The Shanghai Composite ended up 0.2 percent.
India's benchmark BSE Index traded down 0.4 percent, while the NSE ended 0.5 percent lower.