Asian shares skidded to three-week lows and the dollar sagged on Tuesday, after weak Chinese data rekindled worries about its fragile economy and led to sharp losses on Wall Street.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.7 per cent in early trading, touching its lowest levels since Sept. 8.

Japan's Nikkei stock index tumbled 2.4 per cent.

Chinese industrial companies' profits fell at their fastest rate in four years, official data showed on Monday, sparking fresh fears about the strength of that country's economy ahead the final reading of China's Caixin Purchasing Managers' Index on Thursday.

On Wall Street on Monday, major indexes all closed sharply down. The S&P 500 index hit a one-month low on bullish US consumer spending data in August as it raised concerns the Federal Reserve could hike rates at a time of slackening global growth.

The Fed held off from raising interest rates at its meeting earlier this month, citing worries about the global economy, particularly China.

But New York Fed President William Dudley said the central bank remains on track for a likely rate hike this year and could move as soon as next month.

John Williams, head of the San Francisco Fed, also signalled support for an interest rate hike this year, though Chicago Fed chief Charles Evans sounded a far more dovish tone.

"Markets have heard such talk before and with equities under pressure, it was hard to take rate hike talk seriously," Sean Callow, senior currency strategist at Westpac in Sydney, said in a note to clients on Tuesday.

US non-farm payrolls on Friday could add more clarity to the timing of a US policy move, and prop up the sagging greenback.

For now, lower US Treasury yields continued to pressure the dollar, as investors sought the safety of fixed-income assets.

The yield on the benchmark US 10-year note stood at 2.098 per cent, not far from its US close of 2.095 per cent on Monday.

The dollar was down about 0.2 per cent against its Japanese counterpart at 119.73 yen, well below Friday's high of 121.24. The euro slipped about 0.2 per cent to 134.55 yen .

The euro edged down about 0.1 per cent to $1.1232, but remained well above a low of $1.1116 touched on Friday. On Wednesday, a flash estimate of annual euro zone inflation is expected to show a zero reading in September, according to a Reuters poll.

The dollar index slipped about 0.1 per cent to 95.984, extending the previous session's 0.4 per cent drop.

Crude oil futures steadied after plunging nearly 3 per cent overnight as the downbeat Chinese data fuelled fears about global demand.

US crude edged up about 0.2 per cent to $44.51 a barrel, while Brent added about 0.1 per cent to $47.38. – Reuters