The disappointing US data followed poor numbers on factory activity from Asia and Europe but dealers looked forward to a European Central Bank meeting, optimistic there would be new measures to fight the lingering debt crisis.
Tokyo fell 1.09 percent, or 95.69 points to 8,679.82, the lowest close in a month, while Seoul slipped 1.74 percent, or 33.10 points to 1,874.03.
In the afternoon Hong Kong was 1.37 percent lower, while Shanghai was off 0.51 percent.
Sydney closed 0.57 percent, or 24.7 points, lower at 4,278.8 after figures showed the Australian economy grew slower than expected in April-June.
Regional markets took their cue from Wall Street, which returned Tuesday after a long weekend to figures highlighting the ongoing problems with manufacturing, a key driver of the world’s biggest economy.
The Institute for Supply Management said its purchasing managers index stood at 49.6 percent in August, down from 49.8 in July. A reading below 50 indicates contraction. It was the third month of contraction in a row.
Data from the eurozone and Asia on Monday were similarly downbeat. China, a major global growth driver, saw its manufacturing activity fall to its lowest level in more than three years in August.
On Wall Street the Dow fell 0.42 percent and the S&P 500 slipped 0.12 percent but the Nasdaq gained 0.26 percent.
European shares also slipped towards the end of trading after they had spent most of the day in positive territory ahead of Thursday’s ECB meeting.
Dealers have been broadly upbeat since ECB head Mario Draghi in July hinted at a restart of its sovereign bond-buying programme to help under-pressure eurozone nations suffering high borrowing costs.
And expectations were stoked on Monday after European lawmakers said Draghi had told them that buying government bonds of up to three-year maturity on the secondary market did not amount to bailing out spendthrift euro members.
Such a move in the past was justified to help stabilise and protect the 17-nation eurozone, he said, according to the politicians.
Investor sentiment took a knock after Moody’s earlier this week downgraded the outlook on the European Union’s long-term AAA credit rating from stable to negative.
The agency said its move reflected credit risks faced by key European Union budget contributors, including Britain, France and Germany, all of which now have negative outlooks due to the continent’s economic crisis.
On currency markets the euro eased to $1.2527 and 98.20 yen in afternoon Asian trade, from $1.2564 and 98.51 yen in New York late Tuesday. The dollar was at 78.37 yen against 78.40 yen.
In Australia the economy grew 0.6 percent quarter on quarter in April-June, less than half the 1.4 percent seen in the previous three months as a slowdown in China and Europe begins to bite.
Oil prices fell, with New York’s main contract, light sweet crude for October delivery, down a cent to $95.29 a barrel and Brent North Sea crude for October retreating 18 cents to $114.00.
Gold was at $1,692.50 at 0650 GMT compared with $1,691.70 on Tuesday.
In other markets:
— Taipei fell 1.13 percent, or 83.91 points, to 7,367.44.
Taiwan Semiconductor Manufacturing Co lost 2.38 percent to Tw$82.0 while Hon Hai Precision was 1.22 percent lower at Tw$88.8.
— Wellington slipped 0.17 percent, or 6.38 points, to 3,669.65.
Fletcher Building fell 0.61 percent to NZ$6.48 while Telecom rose 1.24 percent to NZ$2.46.