Asian stock markets suffered losses on Friday, with Tokyo and Taipei slumping 3 percent at one point, as persistent worries over the euro zone debt crisis and its negative impact on the global economic recovery sent investors heading for the exits.
U.S. stocks logged their biggest drop of the year Thursday as investors worried about two events coming Friday - a German vote on the EU bailout and options expiration.
The Dow Jones Industrial Average shed 376.36, or 3.6 percent, to close at 10,068.01. The S&P 500 lost 3.9 percent and the Nasdaq fell 4.1 percent.
The U.S. Senate approved a sweeping financial reform bill on Thursday night, capping months of wrangling over the biggest overhaul of financial regulation since the 1930s.
Japan's Nikkei average closed 2.45 percent lower at a five-month low, with exporters hurt after the yen strengthened against the euro overnight on worries about disunity among euro zone leaders on how to address the region's debt crisis.
The benchmark Nikkei ended the session down 245 points to 9,784.5, after earlier falling as low as 3.1 percent to 9,696.63, its lowest since early December 2009.
The broader Topix fell 2 percent to 879.69.
Shares in Sony outperformed the broader market, rising 0.49 percent to 2,880 yen, after the Japanese electronics maker said it was teaming up with Google on Web television.
Among exporters, chip tester maker Advantest fell 2.2 percent to 2,072 yen and TDK Corp shed 3.5 percent to 5,440 yen. Honda Motor skidded 2.7 percent to 2,816 yen.
The euro slipped to the lowest against the yen since November, 2001 below 110 yen the previous day but bounced above 113 yen on Friday. Investors fret about a stronger yen as it curbs exporters' profits when repatriated.
Toyota Motor slid 1.9 percent to 3,399 yen. Toyota and electric carmaker Tesla Motors plan to partner on electric vehicles in California.
Australia Dips 0.2%
Australian shares recouped most of the morning's 3 percent slide to a near 10-month low, to finish 0.2 percent in the red.
The benchmark S&P/ASX 200 index finished at 4,305.4 points, after sliding as much as 3.2 percent to 4,177.30 earlier.
The Australian benchmark index has dropped 6.4 percent this week up until Thursday, and further falls on Friday will mark the worst weekly performance since October 2008 at the height of the global crisis.
Investors have been rocked by worries about Europe's debt woes, Australia's mining tax and China's efforts to cool growth.
But the big banks turned positive by mid-day, as bargain hunters emerged after these stocks fell between 2 and 3 percent. Top lender National Australia Bank rose 2.2 percent, ANZ and CBA advanced 1.7 percent each.
Mining stocks also pared losses. BHP Billiton moved back to positive ground after falling 3 percent. Rio Tinto was ended down 0.7 percent, versus the morning's 5.3 percent slide. Fortesuce Metals reversed course to close 4.2 percent higher.
Sigma Pharmaceuticals soared 37 percent to A$0.48 a share, after it received a $570 million takeover offer, the second takeover bid in a week in Australia's health care sector.
Taiex Falls 2.5%
Taiwan stocks lost 2.51 percent, their largest one-day percentage drop in more than two
weeks, as investors dumped shares of tech exporters whose shipments could suffer because of the weakened euro.
Hon Hai slid 2.24 percent and Acer shares lost 4.1 percent, pulling the electronics sub-index
2.3 percent lower.
Taiwan's economic expansion moderated in the first quarter and a slower rise in export orders in April suggested that overall growth is returning to sustainable levels after a sharp rebound from recession.
The main TAIEX share index ended down 186.72 points at 7,237.71, and marked its largest daily percentage fall since May 5 when it shed 2.95 percent.
China Turns Positive
China's key stock index retraced its steps after opening 2.5 percent lower, as investors hunted for bargains in property firms.
The Shanghai Composite Index closed up 1 percent at 2,583.5 points, after having briefly fallen as low as 2,482.0 points, or 2.9 percent lower, in early trade.
It still lost 4.2 pecent for the week, as the market has been mainly weighed down by concerns over the government's campaign to clamp down on property speculation.
Shenzhen-based developer Gemdale, the most active stock of the day, gained 7.6 percent, while Xinjiang Urban Construction, another active stock, surged its 10 percent limit.
Poly Real Estate Group gained 5.5 percent and China Vanke climbed 3.0 percent.
In Southeast Asia, markets in Singapore and Malaysia tracked the rest of the region lower. The STI declined .17 percent and the KLCI lost 1.4 percent.
Markets in Hong Kong, South Korea and Thailand are closed for Buddha's Birthday.