Nikkei lost 1.3 per cent, Kospi shed 1 per cent, while Chinese blue-chip index lost 0.6%
Shares in Asia dropped to a one-week low on Monday and safe haven assets rose on fears of rising inflation and a surge in coronavirus cases, while oil prices dropped on oversupply concerns.
MSCI's broadest index of Asia-Pacific shares outside Japan shed 1.1 per cent for a second straight day of losses to 677.45, a level not seen since July 12. The index was on track for its biggest daily percentage drop since July 8.
Japan's Nikkei lost 1.3 per cent as did Australia's benchmark share index. South Korea's Kospi shed 1 per cent, while Chinese blue-chip index lost 0.6%.
Oil prices tumbled over 1 per cent after an agreement over the weekend within the OPEC+ group of producers to boost output at a time when the outlook for demand is still cloudy.
Global economic growth is beginning to show signs of fatigue while many countries, particularly in Asia, are struggling to curb the highly contagious Delta variant of the coronavirus and have been forced into some form of lockdown.
Economists at Bank of America downgraded their forecast for US economic growth to 6.5 per cent this year, from 7 per cent previously, but maintained their 5.5 per cent forecast for next year.
As for inflation, the bad news is it's likely to remain elevated near term, they said in a note, pointing to their latest read from their proprietary inflation meter which remains high. The good news is we are likely near the peak, at least for the next few months, as base effects are less favourable and shortage pressures rotate away from goods towards services.
US Federal Reserve Chair Jerome Powell has repeatedly said any inflation flare-up is expected to be transitory, indicating monetary policy will remain supportive for some while yet.