The global credit crunch, caused by increased defaults on excessive loans in the US sub-prime mortgage market, has also prompted insecurity in the markets.
In China, fears that severe winter weather will further reduce spending, also affected the markets.
Tokyo ended down nearly 4.0 per cent, erasing gains on Friday, as Seoul lost 3.85 per cent and Taiwan fell.
'A lot of uncertainty'
Rob Hart, an analyst with Morgan Stanley in Hong Kong, said: "There's a lot of uncertainty out there: uncertainty over the US economy, uncertainty over China's economy."
Chen Huiqin, an analyst at Nanjing-based Huatai Securities, said: "Investors, especially institutional investors, are very cautious."
Chen added that investors were waiting for potential "market rescuing" signals from the Chinese government.
"That could have a strong impact on the market," she said.
In the US stock index futures were down, suggesting that Wall Street would drop again when trading restarts.
Investors in Europe were also setting themselves for a fluctuating week when markets reopen.
Desired cuts
After fears of an international recession caused a fall last Monday, global stocks were bolstered on Tuesday due to a US stimulus plan and a Federal Reserve interest rate cut.
Many traders are hoping for another interest rate cut after the conclusion of a two-day meeting on Wednesday.
Worries persist that the desired quarter-point reduction will not be delivered and share prices could continue their decline.
Koji Takeuchi, senior analyst at the Mizuho Research Institute, said: "If the Fed makes another rate cut, the market will be likely to take the decision positively."
However, he cautioned that such a measure might not completely allay fears. "The market may turn cautious, as there are expectations that the forthcoming data may revive concerns about the US economy."