Asia markets opened lower on Wednesday, with Japanese shares selling off on the back of another yen spike against the dollar.

Australia's ASX 200 was off 0.88 percent, with the heavily-weighted financials sub-index selling off 1.44 percent in early trade. Major banks in the country sold off more than 1 percent each, as traders reacted to the Reserve Bank of Australia's decision on Tuesday to cut its cash rate by another 25 basis points.

In Japan, the Nikkei 225 was down 1.21 percent, while the Topix fell 1.43 percent as shares came under pressure due to yen strength. Some investors were left disappointed with details of Japan's latest fiscal plan.

Across the Korean Strait, the Kospi fell 1.02 percent.

The drop in Asia followed lower finishes in Europe and the US overnight.

"Markets have continued to drop overnight as the third arrow of Abenomics struggles to find its target, investors continue to worry about the capital adequacy of European banks," said Angus Nicholson, a market analyst at brokerage IG.

US stocks closed lower, after US crude futures settled below USD 40 for the first time since April. The Dow Jones industrial average closed down 90.74 points, or 0.49 percent, at 18,313.77, finishing lower for the seventh straight day.

The European banking sector struggled amid investor concerns, days after the conclusion of the Europe-wide stress tests.

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First Published:Aug 3, 2016 7:40 AM IST