Asian stock markets extended a sell-off on Tuesday, following a dismal session on Wall Street that was sparked by the revelation that debt-strapped Greece would not be able to reach a target for reducing its budget deficit.

Japan’s Nikkei 225 index fell 1.5 per cent to 8,415.05 in early trading. South Korea’s Kospi index plunged 4.4 per cent, while Australia’s S&P ASX 200 index fell 0.4 per cent to 3,880.10. Benchmarks in Singapore, Taiwan and New Zealand were also lower.

A persistently strong yen and signs of a global economic slowdown continued to haunt Japanese export shares. Honda Motor Corp. fell 4.4 per cent. Sony Corp. was down 3.5 per cent, while Panasonic Corp. lost 2.5 per cent.

European markets tumbled on Monday after Greece said it wouldn’t be able to reduce its budget deficits as much as it had agreed to as part of a deal to receive more emergency loans.

The latest setback in Greece’s financial crisis sent major stock market indexes to lows for the year Monday. The S&P 500 lost 2.9 per cent to 1,099.23. The Dow Jones industrial average fell 2.4 per cent to 10,655.30. The Nasdaq composite slid 3.3 per cent to 2,335.83.

Markets have responded nervously to headlines out of Europe for weeks, fearful that if Greece defaulted on its debt there might be another lockup in the global financial system, similar to the one triggered by the collapse of Lehman Brothers in September 2008.

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