Asian shares fell for the third day in a row on Wednesday as investors grew more risk averse, with renewed uncertainty over Greece's bailout and mounting worries about slowing global economies overshadowing support provided by ample liquidity.

The three U.S. equity indexes recorded their biggest one-day percentage drop this year on Tuesday while the CBOE Volatility index VIX <.VIX> rose, reflecting receding appetite for riskier assets.

Commodity currencies eased, such as the Australian dollar, which fell for a second session in Asia to a six-week low. Data showing its economy grew a disappointingly slow 0.4 percent last quarter also dented sentiment.

As players took profits from currencies which have been rallying so far this year, notably the Aussie, the euro inched up 0.2 percent to $1.3140, off a three-week low of $1.3103 touched on Tuesday. The Australian dollar trimmed earlier losses to hovered around $1.054.

The MSCI Asia Pacific ex-Japan index <.MIAPJ0000PUS> fell 0.6 percent, led by the materials sector <.MIAPJMT00PUS>, while concerns that slowing global economies would undermine demand for materials pushed Australian shares to seven-week lows.

The ex-Japan index had risen more than 11 percent so far this year through Tuesday's close, and traders said it had looked increasingly ripe for a pullback.

Japan's Nikkei average <.N225> was down 0.7 percent after falling more than 1 percent to a two-week low. <.T>

Markets are facing profit taking pressures, with prices having risen far more strongly than many anticipated this year, said Takao Hattori, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.

With concerns rising over growth prospects in emerging economies, investors realise they need fresh factors than ample liquidity to elevate markets further, he said.

Copper remained sluggish, while oil recovered after falling on easing worries over supply disruptions the day before.

HEAT ON GREECE

Athens turned up the heat on its creditors on Tuesday as it sought to secure a bond swap that will cut its mountainous debt, while the main bondholders group warned a disorderly default would cause over a trillion euros of damage to the euro zone.

Some Greek pension funds and foreign investors rejected the offer, which will see investors lose almost three-quarters of the value of their holdings.

Greek private creditors have until Thursday night to say whether they will participate in the bond swap that is a crucial

part of a bailout programme to save Greece from bankruptcy and meet a debt repayment on March 20.

More signs emerged of the damage to growth inflicted by the euro zone debt crisis, as Brazil followed China in raising fears of slowing growth.

Data on Tuesday showed South America's largest economy expanded just 2.7 percent in 2011 after surging 7.5 percent in 2010. Quarterly growth in Oct-Dec was a scant 0.3 percent following a revised 0.1 percent contraction in the previous quarter.

The euro zone is facing the prospect of a full-fledged recession. The European Union said on Tuesday the euro zone's economy in the final months of 2011 was hit by a collapse in household spending, exports and manufacturing.

But China's Minister of Commerce on Wednesday said Chinese exports increased by an estimated 7 percent in the first two months of this year from year ago levels, while import growth was likely above 7 percent in the same period.

Brent crude climbed above $122 on Wednesday after China said that it will boost energy imports in 2012 and as concerns remained over supply risks and Iran's nuclear programme.

As a gauge of how investors perceive risk, the VIX index, which measures expected volatility in the Standard & Poor's 500 index <.SPX> over the next 30 days, surged by almost 16 percent on Tuesday. It was the biggest one-day rise since November, as the S&P 500 <.SPX> benchmark marked its worst three-day period since December.

Investors seeking safe-haven assets pushed the yield on the five-year Japanese government bonds down to a 16-month low of 0.285 percent on Wednesday.

Asian credit markets weakened in tandem with riskier assets, pushing the spread on the iTraxx Asia ex-Japan investment-grade index 5 basis points wider.

(Editing by Kim Coghill)