Commonwealth Bank of Australia retreated to the lowest in more than two years in Sydney, while Mitsubishi UFJ Financial Group Inc. fell in Tokyo after UBS AG said losses in credit markets may reach $600 billion. Toyota Motor Corp., the world's second-largest automaker, dropped after a gauge of U.S. business activity fell to the lowest level since 2001 and the yen strengthened against the dollar.
The MSCI Asia Pacific Index lost 2.9 percent to 143.21 as of 11:01 a.m. in Tokyo, set for its biggest decline since Feb. 20. Financial stocks were the biggest drag. The benchmark erased its 2.8 percent gain in February, which came amid speculation a bailout of U.S. bond insurers will prevent credit losses from spreading.
Japan's Nikkei 225 Stock Average slipped 4 percent to 13,057.09, its biggest loss since Feb. 6. Australia's S&P/ASX 200 Index slumped 3.1 percent.