Japan's Nikkei again led the way with a loss of 1.2 per cent, hurt in part by a firm yen. MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.2 per cent, while Seoul's KOSPI lost 0.6 per cent.
The week ahead has plenty of event risk with a raft of global business surveys and jobs data from the United States to offer a clearer view on how well the global economy is faring, while the European Central Bank (ECB) might well ease at its meeting on Thursday.
Investors will be hoping this month is not a repeat of January, given MSCI's global index posted its largest monthly decline since May 2012. Emerging markets lost 6.6 per cent for their worst January since 2009.
Not helping was another downbeat report from China where the official Purchasing Managers' Index (PMI) dipped to 50.5 in January from December's 51, in line with market expectations.
Analysts cautioned that the ongoing Lunar New Year holiday, which began on January 31, probably dragged on output as manufacturers shut up shop for China's biggest annual holiday.
There was better news from South Korea where the PMI edged up to its highest in eight months, a further sign of growth after surprisingly upbeat industrial output figures last week.
"Manufacturing conditions continue to improve in Korea, boosted by stronger new orders on the external front," said HSBC economist Ronald Man. "This suggests that Korea is on track for a gradual export-led recovery."
Europe and the United States release their versions of the PMI later Monday and expectations are they will show continued growth, which could help reassure skittish investors.
Second guessing the ECB
However, while the euro zone is slowly recovering inflation is getting dangerously low, piling pressure on the ECB to take further policy action.
Inflation in the region ran at just 0.7 per cent for the year to January, a level that has prompted the central bank to ease in the past.
"We think the low inflation readings in the euro area, along with fears of a further decline into deflationary territory, will lead the ECB to cut the main refinancing rate by 15 basis points, and to cut the deposit rate by 10 basis points," said Dean Maki, an economist at Barclays.
"Advanced economy growth is benefiting from the very accommodative monetary policy that has been fostered by low inflation readings."
This relative improvement in growth is one reason investors have been switching funds out of emerging markets and into the developed world.
The prospect of a further easing in Europe has also weighed on the single currency, pinning it near 10-week lows at $1.3485 on Monday following a break of major support at $1.3506.
The euro has likewise fallen sharply on the yen in the last few sessions and was up just a shade on Monday at 137.86, having been at its lowest since November.
The Japanese currency was aided by safe haven flows amid the strains in emerging markets and gained broadly. The dollar was stuck at 102.24 yen but did find support above recent lows around 101.77/85.
The same flight from risk boosted the major bond markets, with rising prices driving yields on the benchmark 10-year U.S. Treasury note down to 2.66 per cent and again near levels not seen since mid-November.
In commodities, gold failed to benefit as much and actually lost ground over the past week to stand at $1,243.35 an ounce on Monday.
Brent oil was off another 31 cents at $106.09 a barrel, having suffered its biggest monthly loss in four months. U.S. crude eased 63 cents to $96.86.
Copyright: Thomson Reuters 2014