The declines across much of Asia came on the heels of rallies in many regional markets, some to record highs.

"This has to be seen in the perspective that we've had a very nice price rally," said David Cohen, Director of Asian Economic Forecasting with Action Economics in Singapore. "They were due for a little bit of a fall."

In Tokyo, the Nikkei 225 average fell 274.29 points, or 1.52 percent, to 17,779.09, and Hong Kong's Hang Seng Index fell 291.01 points, or 1.4 percent, to 20,509.15.

Singapore shares were down 1.5 percent and Australian stocks lost 1.3 percent. Other markets, including Thailand, Taiwan and Malaysia fell less than 1 percent, and Philippines shares ended little changed.

Many Asian markets remain sensitive to moves on Wall Street and indicators about the U.S. economy because it one of the biggest markets for the region's exporters.

Earlier this month, benchmark indexes in Australia, Indonesia, the Philippines, Singapore and South Korea all hit records.

In China, where shares plunged 8.3 percent Monday, the Shanghai benchmark index gained 0.6 percent Friday to 3,914.18.

U.S. stocks fell sharply as investors' hopes for an interest rate cut later this year began to fade. The cut began to look unlikely because of rising bond yields. Many believe the higher yields will make the Federal Reserve less interested in reducing short-term interest rates.

The Dow fell 198.94, or 1.48 percent, to 13,266.73, bringing its three-day loss to about 410 points. The Nasdaq composite index also sank, losing 45.80, or 1.77 percent, to 2,541.38.