South Korea Kopsi shares index fell 2.2% after the Bank of Korea cut its key interest rate to 3% from 3.25%, the first reduction for three years.
The action raised fears that the economic outlook had worsened sharply.
Japan’s main Nikkei index lost 1.5% on disappointment that the Bank of Japan had barely changed its monetary policy.
Hong Kong’s Hang Seng index was down more than 2% and Sydney’s All Ordinaries index was 0.7% lower.
Korea is a very export dependent economy, and slowing demand from key markets such as Europe has been a worry.
In a statement the Bank of Korea said: “In Korea, the Committee appraises the trend of economic growth to have weakened more than originally anticipated, with the rates of growth in exports and domestic demand remaining at low levels.”
Last month, the finance ministry cut its growth forecast for 2012 to 3.3% from a previously projected 3.7%.