Asian stocks closed mostly lower on Friday after US stocks lost ground overnight in response to a jump in long-term interest rates, and a spike in crude oil prices, dealers said.
Oil prices continued higher in Asian trade as the market focused on concerns about developments in Iran and Nigeria and this continued to weigh on trade.
That coupled with the prospect of a tighter Japanese monetary policy resulted in Tokyo falling 1.55 percent.
Taipei was again struck by cross-strait tension and slumped 1.34 percent. Hong Kong, Manila and Sydney were also lower.
Mumbai eased off its record higher while Seoul was the worst performer on the day, tumbling almost three percent amid a possible probe into Samsung Electronics and Hynix for alleged price fixing.
Bangkok was flat in cautious trade ahead of another round of anti-government rallies as political parties gear-up for the April 2 poll. However, Singapore bucked the trend and made modest gains on China-related stocks.
Taipei share prices closed 1.34 percent lower as investors chose to lock in profits amid concerns that cross-strait relations will remain a drag on the market in the near term.
Dealers said investors were reluctant to push the upside after recent gains given concerns at the fallout from President Chen Shui-bian's (陳水扁) moves to scrap the National Unification Council (NUC).
The move sparked strong protests from Beijing.
The TAIEX lost 89.30 points to 6,553.66 on turnover of NT$99.75 billion (US$3.08 billion).
"The market came down simply because there was no justification in its going up strongly at this juncture," said Oliver Fang, a Yuanta Core Pacific Securities (元大京華證券) assistant vice president who serves mainly foreign investors.
"Don't be misled by the gains posted in the previous two sessions," he said. "Political concerns after President Chen's controversial move are far from over."
"More political noise from the opposition [in Taiwan] and Communist leaders in Beijing will be part of our life in the coming weeks," he said.
Tokyo share prices closed sharply lower as a jump in consumer inflation spooked investors nervous about an expected end to the Bank of Japan's ultra-loose monetary policy.
Dealers said losses on Wall Street had added to concerns over a 0.5 percent rise in Japan's core consumer prices, the fastest pace for almost eight years.
The NIKKEI-225 index lost 246.42 points or 1.55 percent to 15,663.34 as 1.73 billion shares changed hands.
The stronger-than-expected inflation data stoked speculation that the central bank could end its five-year-old policy of flooding the banking system with virtually free credit as soon as Thursday.
"Now it is certain that the end of the [super-loose] policy is coming at the March meeting [next week]," said Mitsushige Akino, a chief fund manager at Ichiyochi Investment Management.
Other analysts said a move was more likely next month after the end of the current fiscal year.
"In the mid-term, an end to the policy is not in itself bad news, as it will bring normalization to monetary policy and signal an end to prolonged deflation," Akino said.
"But in the short-term, it is likely to have a negative effect on the [stock] market given the likelihood of a stronger yen, so for the next week at least market sentiment is likely to sag," he said.
Seoul share prices closed 2.83 percent lower as Samsung Electronics and Hynix tumbled on a possible price fixing probe by regulators.