Asian shares came under severe selling pressure on Friday due largely to worries over the health of European banks while safe haven assets like Japanese yen, gold and government bonds soared.
The sell-off followed a sharp drop in global markets on Thursday on concerns over the health of the global economy and the banking sector.
Japan's Nikkei dropped 5.3 percent to a 15-month low, extending the rout it underwent in seven of the last eight sessions.
In Australia, the S&P/ASX 200 was down 1.02 percent, led by a 1.41 percent fall in the financial sector.
South Korea's Kospi was down 2.15 percent an Hong Kong's Hang Seng index dropped more than one percent.
Chinese and Taiwanese markets are closed for the Luna New Year holidays and will resume trade next week.
Following a rout in European banks, Asian financial institutions came under pressure, with Japan's Nomura falling 8.29 percent and Mizuho Financial shedding 3.54 percent.
"The markets are clearly starting to price in a sharp slowdown in the world economy and even a recession in the United States," Tsuyoshi Shimizu, chief strategist at Mizuho Asset Management, rold Reuters.
In India, a financials-led sell-off saw the benchmark BSE Sensex index falling over 3 per cent on Thursday.
"There are mounting concerns about the ability of central banks to continue to prop up asset prices ... That's part of why we're seeing assets across the board come under pressure," ," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
The yen touched 110.985 to the dollar, a rise of almost 10 percent from its six-week low touched on Jan 29.
The 10-year US Treasuries were at their highest since August 2012, while gold surged more than four percent to one-year high of $1,262.90 per ounce.