Policymakers continued their debate on how to rescue debt-swamped eurozone economies, as International Monetary Fund chief Dominique Strauss-Kahn was refused bail by a New York court after denying sexual assault charges.
The IMF executive board met late Monday to discuss Strauss-Kahn's situation, but made no public announcement on his fate at the helm of the US-based lender.
Meanwhile the Fund signed off on a 78-billion-euro ($111 billion) EU-IMF bailout for Portugal, and approved 1.58 billion euros in new assistance to debt-laden Ireland.
Portugal, under pressure from the markets for months, finally sought a bailout in April after the minority socialist government and right-wing opposition failed to agree on a new round of budget cuts.
But the move failed to inspire the markets, with Tokyo 0.44 percent lower by the break, Hong Kong down 0.58 percent mid-morning and Shanghai off 0.17 percent.
Seoul lost 0.34 percent, but Sydney proved the exception, rising 0.17 percent.
Tokyo suffered from the weak Wall Street lead and the continuing ramifications of the country's nuclear disaster, sparked by the March 11 quake and tsunami.
Sentiment was also hurt after Morgan Stanley Capital International on Monday said it would delete 20 Japanese stocks from its MSCI Global Standard Indices on May 31.
"It looks like investors in the US and Europe are starting to hold back on buying Japanese stocks, so the attention is on whether demand will come from Asian investors," said Hideyuki Ishiguro, a strategist at Okasan Securities.
TEPCO, the operator of the stricken Fukushima Daiichi atomic plant was off 4.3 percent, and other power companies were also down.
A mooted debt waiver for TEPCO was also battering financial plays, with Sumitomo Mitsui FG down 1.1 percent and Mizuho FG off 0.8 percent.
Kazuhiro Takahashi, general manager at Daiwa Securities, said he did not expect heavy selling pressure after a 3.1 percent drop on the index over the past three sessions.
"It doesn't seem like there will be additional major selling for today," he told Dow Jones Newswires.
On Monday slumping tech stocks pulled US markets down as the country struck its limit on borrowing with no increase in sight, putting more pressure on the government to slash spending.
The Dow Jones Industrial Average closed down 47.38 points (0.38 percent) at 12,548.37, with technology and consumer stocks leading the way down.
The euro eased against the dollar in Asian trade amid continued investor concerns about European sovereign debt.
The unit was at $1.4149 in Tokyo morning trade, down from $1.4153 in New York late Monday.
The single European currency rose to 114.59, compared to 114.34 yen in late New York trade. The dollar rose to 80.98 yen from 80.76 yen.
Oil slipped as demand concerns continued to cast a shadow on sentiment, analysts said.
New York's main contract, light sweet crude for June delivery was off 27 cents to $97.10 a barrel and Brent North Sea crude eased 30 cents to $110.54.
The two contracts had closed weaker Monday in US trade.
"Obviously we were down in the US session," said Ben Westmore, a Melbourne-based commodity economist with National Australia Bank.
"A lot of that has to do with concerns for US demand," he told AFP.
Gold opened in Hong Kong at $1,491.50-$1,492.50 per ounce, down from its Monday close of $1,496.00-$1,497.00.