Asian markets traded lower in the morning as US economic concerns rebounded after weaker-than-expected data, and investors awaited the outcome of Bank of Japan's policy meet.
The Nikkei average index fell 1.7 percent or 215.43 points to 12146.8 while South Korea's KOSPI was down 2 percent or 38.66 points to 1944.6. Australia's S&P/ASX 200 slipped 0.7 percent or 35.90 points to 4921.8.
Markets in mainland China and Hong Kong remain closed for the holidays.
The stage was set for a bleak performance across the region after ADP's private sector job report showed that US companies added fewer employees than expected in March and the Institute for Supply Management's (ISM) non-manufacturing index showed slower service sector growth across the country.
The S&P 500 recorded its biggest daily fall in more than a month in the previous session, as the weak data sparked concerns about America's economic recovery, deflating the investor sentiments.
All eyes are now on the BoJ's policy meet, set to conclude during the day. Analysts widely expect the central bank to take up aggressive monetary easing measures under the new governor Haruhiko Kuroda, who is known for his pro-stimulus stand.
But the yen remained firm against its peers during the day, clearly indicating that investors were cautious of an underwhelming BoJ decision. In the currency market, the greenback traded at about 92 yen during the day while the euro stood at about 119 yen.
"Once again the most exciting currency is the yen which continues its volatility ahead of today's conclusion of the BoJ's monthly policy meeting, the first under new governor Kuroda," said Kelly Teoh, market strategist at IG Markets in Singapore.
"Traders have already factored in plenty of aggressive measures from Japan's central bank so it will be hard to surprise them on the upside".
South Korean investor sentiments remained weak as the risks of a conflict with North Korea escalated after the latter blocked entry into a joint industrial complex for the second day. The United States has indicated that it is sending its advanced missile defence system to reinforce its military presence in the Pacific island of Guam after stating that Pyongyang is a "real and clear danger".
The strong yen weighed on exporter stocks in Tokyo. Canon was down 4.7 percent while Sony fell 4.3 percent. Toshiba Corp was down 3.9 percent.
Miners traded lower in Sydney. BHP Billiton was down 1.4 percent while Rio Tinto fell 1.1 percent and Newcrest Mining dropped 4.5 percent.