Asia markets fell on Tuesday, extending Monday's losses, following a lower finish in US stocks as investors looked ahead to central bank meetings in the US and Japan.

Australian markets returned to trade after being shut for the Queen's Birthday public holiday on Monday. The benchmark ASX 200 was off 1.53 percent in early trade, weighed by more than 1 percent declines each in the energy, materials and financials sub-indexes.

In Japan, the Nikkei 225 wavered between positive and negative territory before trading down 0.17 percent, after tumbling 3.51 percent on the back of a relatively stronger yen on Monday. The yen traded at 106.29 against the dollar at 8:09 a.m. HK/SIN, compared to levels around 105.83 on Monday afternoon local time.

Across the Korean Strait, the Kospi fell 0.11 percent.

Stateside, the Dow Jones industrial average closed down 132.86 points, or 0.74 percent, at 17,732.48; the S&P 500 was down 17.01 points, or 0.81 percent, at 2,079.06. The Nasdaq composite finished down 46.11 points, or 0.94 percent, at 4,848.44.

"Undoubtedly, the story of the moment is the consistent moves into fixed income," said Chris Weston, chief market strategist at spreadbettor IG. "Not only is the fixed income market benefiting from low inflation expectations and unconventional central bank policy, but we are now seeing increasing risk aversion flows."

Government bond yields have hit record lows in recent days. Stateside, Treasury yields were lower, with the 10-year yield near 1.61 percent in the afternoon local time, around its lowest since Feb. 11. The German 10-year Bund yield remained near zero, while the 10-year Japanese government bond yield was at -0.16 percent.

Bond prices move inversely to yields.

The US Federal Open Market Committee will begin its two-day meeting starting on Tuesday.

Kit Juckes, global fixed income strategist at Societe Generale, said in a note Monday the market did not expect the Fed to raise rates.

"The challenge for the Fed is how to continue laying the groundwork for an eventual hike if the data bounce back from the disappointment of May payrolls, against the backdrop of nervous markets," he said.

The Bank of Japan starts its two-day meeting on Wednesday, June 15.

In the UK, two new polls showed public opinion over a Brexit remained divided. An ORB poll for the Telegraph showed 48 percent of Britons would vote to remain in the European Union, while 49 percent would vote to leave.

A YouGov poll for the Times of London showed 46 percent preferred to leave, while 39 percent wanted to remain. Popular British newspaper The Sun also endorsed the leave vote for the upcoming referendum vote on June 23.

Gareth Nicholson, an investment manager at Aberdeen Asset Management Asia told CNBC's "Squawk Box" that whichever way the Brexit vote goes, market volatility will increase. "Markets are getting concerned ... volatility is not good for the broader market. That's why you see weakness in foreign exchange and equity."

The British pound traded at USD 1.4209 early morning Asia time, compared to levels around USD 1.4600 in late May.

Share Market Live

NSE

First Published:Jun 14, 2016 7:40 AM IST