MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> fell 0.3 percent to a fresh four-week low and Japan's Nikkei stock average <.N225> opened down 0.2 percent. .T
"I don't recall anyone having had good economic indicators lately. Everyone knows the global economy is in a trough. The policies that will be announced to tackle the problems will be much more important," said Lee Seung-woo, an analyst at KDB Daewoo Securities in Seoul.
European shares fell and U.S. stocks closed mixed while the euro slid on Tuesday.
U.S. Treasuries gave back some of Friday's gains, while two-year yields on Spanish and Italian government bonds fell.
An Institute for Supply Management survey on Tuesday showed U.S. manufacturing shrank at its sharpest clip in more than three years last month, the latest sign that the slowing global economy is weighing on the fragile U.S. recovery.
But U.S. automakers turned in their best August since before the 2007-09 recession, with monthly auto sales rising 20 percent from a year ago as consumers showed more confidence in buying big-ticket items on easier credit terms.
"Consumers will likely continue to respond to low interest rates and help support that part of the manufacturing sector," Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. LLC, said in a note. "The weakness in US manufacturing seems to be sitting squarely on the shoulders of events outside of the control of US policy makers."
The euro slipped 0.3 percent but traded within recent ranges at $1.2530, while the dollar inched up 0.1 percent against the yen to 78.45 yen.
Market expectations for additional monetary stimulus from the U.S. Federal Reserve gained momentum after Fed Chairman Ben Bernanke last week kept the door open for further easing, saying the Fed was ready to act if needed. His comments weakened the dollar and pushed down U.S. Treasury yields on Friday.
"It's no surprise that manufacturing is sluggish everywhere these days, and the ISM was used as an excuse before the key events to adjust positions," such as taking profits from U.S. Treasuries or buying the dollar back, said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.
He said the dollar may stay firm against the yen with some traders eyeing to trigger stops around 78.55-78.60 yen, but the upside was capped near 78.70-78.80 yen with offers lined up.
"The Fed is likely to ease further this month but exactly what options it will take will depend on data. So until we see the jobs report, we can't push markets either way," Saito said.
Friday's jobs data will likely show U.S. employers increased payrolls by 125,000 workers in August, down from July's 163,000, while the unemployment rate is seen steady at 8.3 percent. An elevated unemployment rate is a major drag on the economy. The Fed holds its meeting on September 12-13.
For the ECB, markets expect the bank to outline its bond-buying scheme aimed at driving down the yields of highly indebt countries such as Spain to reduce the cost of their financing.
Some expect the ECB may offer some details such as identifying maturities of bonds it intends to buy, most likely two to three years.
The Australian dollar hit a fresh six-week low around $1.0198 and hovered near a nine-week low against the euro as the resource-rich country takes a hit from the slowdown in the economy ofChina, the world's second-largest and Australia's largest export market.
Falling prices of its key exports such as iron ore due to slackening Chinese demand have forced Australian miners to cut capital spending as well as their expansion plans.
Growing expectations for more accommodative monetary policy boosted the appeal of gold as a hedge against future inflation risks.
Spot gold was down 0.1 percent at $1,692.21 an ounce after touching is highest since mid-March of $1,698.45 an ounce on Tuesday. Data showed hefty inflows into exchange-traded funds in August, taking holdings to record highs..