MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.6 percent to a one-week low.
Investors dumped shares on Monday and fled to the safety of bonds while the Japanese yen hovered near a six-week high as risk assets fell out of favour on growing worries about an impending U.S. recession, sending global yields plunging.
US stocks futures turned negative in early Asian trading with E-minis for the S&P 500 skidding 0.5 percent. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.6 percent to a one-week low. Japan's Nikkei tumbled 2.9 percent, South Korea's Kospi index declined 1.5 percent while Australian shares faltered 1.3 percent.
On Friday, all three major US stock indexes registered their biggest one-day percentage losses since Jan.3 with the Dow sliding 1.8 percent, the S&P 500 off 1.9 percent and the Nasdaq dropping 2.5 percent.
Concerns about the health of the world economy heightened last week after cautious remarks by the US Federal Reserve sent 10-year treasury yields to the lowest since early 2018.
Adding to the fears of a more widespread global downturn, manufacturing output data from Germany showed a contraction for the third straight month. And in the United States, preliminary measures of manufacturing and services activity for March showed both sectors grew at a slower pace than in February, according to data from IHS Markit.
In response, 10-year treasury yields slipped below the three-month rate for the first time since 2007. Historically, an inverted yield curve - where long-term rates fall below short-term - has signalled an upcoming recession.
"We have re-run our preferred yield curve recession models, which now suggest a 30-35 percent chance of a US recession occurring over the next 10â€‘18 months," said Tapas Strickland, markets strategist at National Australia Bank.
Typically a 40-60 percent probability sees a recession within the next 10-18 months, Strickland added, basing the analysis on previous recessions.
"The risk of a US recession has risen and is flashing amber and this will keep markets pricing a high chance of the Fed cutting rates."
As bonds rallied on Monday, yields on 10-year Japanese government bonds slumped to minus 8 basis points, the weakest since September 2016. Australian 10-year year yields plunged to a record low of 1.756.
Much of the concerns around global growth is stemming from Europe and China which are battling separate tariff wars with the United States.
Politics was also in focus in the United States and Britain.
A nearly two-year US investigation found no evidence of collusion between Donald Trump's election team and Russia, in a major political victory for the U.S. President.
The long-awaited Mueller report into whether Trump's campaign colluded with Russia to help Trump defeat his Democratic opponent, Hillary Clinton, marked a major milestone of his presidency as he prepares for his 2020 re-election battle.
Political turmoil in Britain over the country's exit from the European Union also remains a drag on risk assets.
On Sunday, Rupert Murdoch's Sun newspaper said in a front page editorial British Prime Minister Theresa May must announce on Monday she will stand down as soon as her Brexit deal is approved.
The British pound was a shade lower at USD 1.3189 after three straight days of wild gyrations. The currency slipped 0.7 percent last week.
In currency markets, the Japanese yen - a perceived safe haven - held near its highest since Feb. 11. It was last flat at 109.95 per dollar.
The Australian dollar, a liquid proxy for risk play, was down for its third straight session of losses at USD 0.7073.In commodities, US crude fell 33 cents to USD 58.71 per barrel. Brent crude futures eased 24 cents to USD 66.79.