The MSCI index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.5 percent. Australian shares .AXJO were down 0.2 percent and South Korean shares .KS11 slipped 0.9 percent.

Tokyo's Nikkei average finance/markets/index?symbol=jp%21n225">.N225 opened down 1.7 percent as a slew of stocks passed the deadline for buyers to gain rights to first-half dividends. .T

The falls follow an easing in global stocks and a drop in the euro to a near two-week low of $1.2886 on Tuesday. The CBOE Volatility index .VIX, a gauge of expected volatility in the Standard & Poor's 500 index .SPX, rose to its highest in about two weeks.

With this week marking the month-end, the end of July-September quarter, and in Japan, the fiscal first-half, flows were likely to be driven by book-closing related adjustments.

Kenichi Hirano, operating officer at Tachibana Securities in Tokyo, said some investors could buy for window-dressing purposes ahead of the fiscal half-end.

Others noted that a further drop in Japanese stocks could fuel speculation about yen-weakening intervention by Japanese authorities to help shore up first-half book closing.

Such wariness could limit the dollar's downside against the yen, said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.

"Selling and buying forces both lack strong momentum, but the market is biased towards selling, with euro capped by its own problems and the dollar also top-heavy against the yen," he said.

He said the euro could slip briefly below 100 yen while the dollar could approach 77.50 yen. But heavy bids placed at 77.50 yen may spur a blip above 78 yen, he said.

The yen traded at 77.72 yen, near a one-week high of 77.655 hit on Tuesday, and was at 100.26 against the euro. The euro steadied at $1.2900, but stayed pressured.

Protests flared up in Spain on Tuesday ahead of the planned announcement of a new round of unpopular austerity measures for the 2013 budget on Thursday. Spain will also likely set a fresh timetable for economic reforms later this week.

Markets are closely watching Madrid's ability to control its finances, with ballooning regional debts crippling the government's refinancing efforts.

But Prime Minister Mariano Rajoy is holding back from seeking a sovereign bailout, which would set the stage for the European Central Bank to start buying high-yielding Spanish bonds to ease the country's borrowing strains.

U.S. equities fell on Tuesday, hurt in part by comments from prominent asset manager BlackRock Inc (BLK.N) which said it believed this year's rally in the U.S. stock market has run its course.

The fall came despite the Conference Board, an industry group, saying U.S. consumer confidence jumped to its highest level in seven months in September,

Market rallies inspired by monetary easing measures taken this month by the U.S. Federal Reserve and the Bank of Japan, as well as the ECB's bond-buying plan, have quickly been overtaken by concerns about deteriorating world economies.

China's central bank said on Tuesday, after its third-quarter monetary policy meeting, that it will "fine tune" policy to cushion the economy against global risks while closely watching the possible impact from recent policy loosening in the United States and Europe.

China cut interest rates twice in June and July and lowered banks' reserve requirement ratio (RRR) three times since late 2011, but has refrained from cutting interest rates or RRR since July.

U.S. crude fell 0.6 percent to $90.87 a barrel while Brent also fell 0.6 percent to $109.82. Brent crude rose on Tuesday in choppy trade as tensions over Iran reinforced the geopolitical fear premium but growth concerns pressured U.S. oil prices.