Oil prices fell to below $95 per barrel amid concern central bankers around the world might ease off measures to boost the global economy.
Investors were disappointed after Japan's central bank failed to deliver expected measures Tuesday to ease bond market volatility. Instead, the bank only upgraded its economic outlook.
Tokyo's Nikkei 225, the regional heavyweight, shed 1.8 per cent to 13,077.83, extending declines after spiking up nearly 5 per cent Monday after the prime minister promised new tax cuts. Markets in China, Hong Kong and Taiwan were closed for a holiday.
Seoul's Kospi shed 0.3 per cent to 1,914.86 while Sydney's ASX S&P 200 fell 0.9 per cent to 4,712.70. Singapore's FTSE Straits Times index lost 0.3 per cent to 3,160.28 and New Zealand was down 0.3 per cent at 4,448.97.
"Riots in Istanbul, central banks raising stop signs, bond yields on the rise and equity markets skidding; brace yourselves, we are in for a very rough ride over the coming weeks," Evan Lucas, market strategist for IG in Melbourne, said in an email commentary.
Uncertainty about China's recovery has weighed on markets following weekend data showing exports, retail sales and other indicators weaker than expected.
Trading this week has been lacklustre following a volatile period that saw many major markets come off multiyear or even record highs.
Major indices in the United States, Britain, France and Germany all fell Monday.
Investors also closely watching the United States and whether the Federal Reserve eases its monetary stimulus. The Fed has been buying bonds to push down market interest rates.
Speculation that the Fed might wind down its stimulus had depressed stock prices but concern eased after last week's U.S. jobs data suggested a recovery might not be strong enough yet.
The euro has gained on easing expectations of tighter U.S. monetary policy despite uncertainty about the outlook for the 17 countries that use the common European currency. But on Wednesday, the euro slipped to $1.3309 from $1.3311 late Tuesday in New York. The dollar rose to 96.49 yen from 96.22 yen.
Benchmark crude for July delivery declined 64 cents to $94.74 per barrel in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract fell 39 cents to settle at $95.38.