The report highlights the failure of social services in countries like Thailand, Cambodia and Vietnam to provide adequate psychological support for child victims of rape and incest, or for those used as prostitutes or in pornography.
The research, unveiled in Bangkok found victims of abuse as young as four.
The UN's Economic and Social Commission for Asia and the Pacific (ESCAP) said Asian governments are failing the children caught up in the region's sex industry.
The report highlights the failure of social services in countries like Thailand, Cambodia and Vietnam to provide adequate psychological support for child victims of rape and incest, or for those used as prostitutes or in pornography.
While the physical health of the child victims is sometimes dealt with, psychological assistance to help them overcome the trauma of sexual abuse and exploitation is virtually non-existent.
'Shocked'
Nanda Krairiksh, from ESCAP human resources development section the unit which carried out some of the research, says it is essential the psychological problems are dealt with.
"We were quite shocked in terms of the psychological findings."
" We didn't expect them to be so severe," she said.
The reports on the Greater Mekong subregion and South Asia found sexually exploited and abused children often suffer mental problems such as depression, suicidal tendencies and substance abuse.
Taboo subject
While there is some public awareness of sexual exploitation of children, incest and child rape were taboo subjects in Asia which made the problem harder to tackle, she said.
In Cambodia 98% of girls in prostitution are the main providers for their families and in Vietnam 49% of girls in prostitution were victims of prior sexual abuse, the studies found.
Some 80% of sexually exploited children in Thailand were from dysfunctional families and 31% had been victims of sexual abuse.
Many Asian governments would rather ignore the issue than admit they had a problem with sexual abuse and exploitation of children, Nanda Krairiksh said.