The Nikkei 225 was in correction territory, having declined around 12 percent from its 52-week high as of Friday morning.

Japan's Nikkei 225 fell 2.32 percent, or 508.24 points, to close at 21,382.62 with losses seen in most sectors. Automakers, financials, manufacturers and technology stocks ended the session firmly in negative territory. Among blue chips, Toyota sank 1.14 percent, Fanuc Manufacturing lost 3.98 percent and Fast Retailing was down 3.69 percent at the end of the day.

Asian shares closed lower on Friday, taking cues from U.S. indexes which extended sharp losses in the last session.

Across the Korean Strait, the Kospi lost 1.82 percent to finish at 2,363.77, with most sectors closing the day in negative territory.

Tech heavyweight Samsung Electronics was down 2.83 percent on the day. The stock was also not helped by news on Thursday that prosecutors had conducted a search on the company's offices as part of a probe into previous South Korean president Lee Myung-bak, Reuters said, citing Yonhap News Agency.

Down Under, the S&P/ASX 200 declined 0.89 percent to close at 5,838, with all sectors but gold producers in the red. The energy sector led losses, falling 2.14 percent, while the heavily weighted financials sub-index was down 0.51 percent.

Greater China markets were similarly downbeat. Hong Kong's lost 2.99 percent by 3:04 p.m. HK/SIN, but was off its session lows. Before the market close, heavily-weighted financials HSBC and China Construction Bank lost 0.87 percent and 4.33 percent, respectively.

Property developers also saw significant declines: China Evergrande Group dropped 5.79 percent and Country Garden fell 6.12 percent by 3:05 p.m. HK/SIN. Tech giant Tencent traded lower by 2.43 percent.

On the mainland, the fell 4.02 percent to close at 3,130.93 and the Shenzhen composite sank 3.19 percent to end at 1,679.26. The blue chip CSI 300 index fell 4.26 percent by the end of the day.

Major mainland insurers underperformed the broader market, with Ping An Insurance Group losing 6.58 percent. China Life Insurance closed down 6.16 percent.

The People's Bank of China on Friday announced it released nearly 2 trillion yuan ($316.28 billion) in liquidity to meet cash demand ahead of the Lunar New Year, Reuters reported.

Meanwhile, data released on Friday showed the consumer price index rose 1.5 percent in January compared to one year ago, which was in line with forecasts, Reuters said. Meanwhile, the producer price index rose 4.3 percent on year, a touch below the 4.4 percent projected in a Reuters poll.

The declines in Asia mirrored the showing from U.S. stocks, which plummeted once again on Thursday as investors worried about higher U.S. bond yields.

"From the professional investment community, you've seen some capitulation. From the retail community, you've seen almost none. What scares us the most about the markets going forward is that you've had this large inflow of money coming from retail and very little of it has exited the market so far," Eric Liu, head of research at Vanda Research, told CNBC's "Squawk Box."

The sell-off stateside came after the yield on the 10-year U.S. Treasury note neared its highest levels in four years after the Bank of England indicated the need for interest rates to rise more and sooner than earlier forecast.

The Dow Jones industrial average moved into correction territory after falling 1,032.89 points, or 4.15 percent, to close at 23,860.46.

Meanwhile, the yield on the benchmark 10-year U.S. Treasury note last stood at 2.83 percent after rising as high as 2.88 percent on Thursday.

The most recent stock market declines are a continuation of the sell-off that began last Friday when U.S. bond yields rose on the back of a better-than-expected jobs print.

Investors stateside also kept an eye on a possible government shutdown. The U.S. Senate passed a funding bill early on Friday, although that came after government funding lapsed at midnight U.S. hours.

In currencies, the dollar index, which measures the U.S. currency against a basket of six rivals, was mostly steady at 90.219 at 2:49 p.m. HK/SIN.

Against the yen, the greenback edged up to trade at 108.97.

On the commodities front, oil prices extended losses after declining for the fifth consecutive day on Thursday. U.S. West Texas Intermediate crude futures lost 1.01 percent to trade at $60.53 per barrel. Brent crude futures slid 0.68 percent to trade at $64.37.

— CNBC's Fred Imbert contributed to this report.