Sydney drops 1.5%
Australia's benchmark S&P ASX 200 closed at its lowest level in over three weeks on caution ahead of the corporate earnings season. Data from Thompson Reuters showed the index posted its biggest one-day decline in over three months.
Meanwhile, the Australian dollar retreated from a one-month high of $0.9087 U.S. cents.
Banks and resources led declines with all of Australia's "Big 4" lenders down over 1 percent each while blue-chip miners BHP Billiton closed down 1 percent and Atlas Iron fell 3.6 percent on falling iron-ore prices.
Engineering firm Forge closed 18 percent lower following an earlier 30 percent slump after warning of an additional $23 million to its previously announced $28 million profit write-down for the 2014 fiscal year.
(Read more: Why gold will tank in 2014: Goldman Sachs)
Kospi slips 0.1%
South Korean shares bounced between gains and losses in choppy trade but larger losses were capped as exporters benefited from a stronger Japanese currency. Both Hyundai Motor and Samsung Electronics rose over 1 percent each.
Korea Electric Power (KEPCO) rallied over 3 percent after announcing that it expects to make a profit for 2013, its first in six years, thanks to self-rescue efforts.
The benchmark Kospi also got a boost from data that showed December exporters rose an annual 7 percent, which indicated that the nation's economic recovery was underway.
(Read more: How 2014 could be quite different from 2013
India down 0.5%
Indian shares posted modest losses ahead of the release of December wholesale price inflation data.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC