Japan's Nikkei dropped 0.7 percent while MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.1 percent.
On Wall Street, the S&P 500 <.SPX>, the Nasdaq <.IXIC> and the Dow <.DJI> all posted their biggest one-day percentage drops since Jan. 3 on Tuesday. The S&P lost 1.42 percent.
Putting a dent on risky assets was a report by the Financial Times that the Trump administration has rejected an offer from China for preparatory trade talks this week ahead of high-level negotiations scheduled for next week.
White House economic adviser Larry Kudlow denied the report, helping U.S. equities pare some losses though the fresh concerns about U.S.-China relations kept share prices in check.
Data published over the last 24 hours all pointed to a rough year ahead for the world economy.
U.S. home sales tumbled 6.4 percent in December, falling short of the weakest forecast, to their lowest level in three years. Compared from a year ago, they were down more than 10 percent for the first time since 2011.
House price increases slowed sharply, adding to the evidences of a further loss of momentum in the housing market.
Canadian factory sales and wholesale trade both slumped more than expected in November, while in Germany survey by the ZEW research institute showed morale among German investors improved slightly in January, but their assessment of the economy's current condition deteriorated to a four-year low.
Japan's exports and imports also fell short of market expectations, with exports posting the biggest fall in more than two years.
The pressure on growth at home is also one of the reasons markets expect the Bank of Japan to keep policy easy at its meeting ending later on Wednesday, with slowing global demand set to see the central bank trimming its inflation forecast.
The latest weak indicators came after the IMF trimmed its global growth forecasts on Monday, in its second downgrade in three months, just after China reported its 2018 growth slipped to the worst level in nearly three decades.
"Risk assets prices have been essentially supported just by easing of U.S. rate hike expectations," said Shuji Shirota, head of macro economics strategy at HSBC Securities.
"Economic data has been weak and the U.S. government shutdown should be hurting economic sentiment but even that has been considered as positive for risk assets, on the ground that they make it difficult for the Fed to raise rates."
U.S. bond prices rebounded, with the benchmark 10-year yield slipping to 2.741 percent
As U.S. yields fell, the dollar lost steam against the yen, fetching 109.33 yen
But the euro weakened against the dollar under the weight of recent weakness in the euro zone economy and worries about fallouts from Brexit.
The common currency traded at $1.1362
In commodities, U.S. West Texas Intermediate (WTI) crude futures
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