Nikkei declines 1.4%
Japan's benchmark index widened losses as dollar-yen fell below the 98 handle in afternoon trade and as investors digested the latest batch of corporate earnings. The Nikkei has been steadily declining since hitting a two-month high at 14,953 points on July 19.
"The market has turned from exuberance to pessimism after Prime Minister Abe's election. The main focus has been the reluctance of Japanese companies to spend from the windfall of a weaker yen which shows the uncertainty they feel towards the future," wrote Kelly Teoh, market strategist at IG in a note.
(Read more: Here's what could really knock the yen back down)
Camera maker Konica Minolta rallied 6 percent after posting better-than-expected first-quarter results, but Fujitsu fell 3 percent after reporting a net loss and digital pen maker Wacom sank over 15 percent after announcing a 5.5 percent fall in net profit.
Mobile carrier Softbank ended down 1 percent following a 2 percent spike earlier after announcing late on Tuesday that its quarterly profit doubled from the previous year. Battery maker GS Yuasa climbed 7.5 percent on better-than-expected quarterly results.
Companies reporting after the market-close include Panasonic, Nintendo, Mazda Motor and Honda Motor.
Shanghai up 0.2%
China's benchmark stock index was unable to close above the 2,000 level for a third straight session as caution set in ahead of Thursday's closely-watched official manufacturing purchasing managers index (PMI).
(Read more: Official data to signal more pain for Chinese factories)
The official Xinhua news agency reported late on Tuesday that China's Politburo would increase support for the real economy while promoting real estate development. The comments boosted property developers, with China Merchants Property leading gains by 4.5 percent and Gemdale up 3.7 percent.
"Further measures are needed to close the gap between potential and targeted growth. We expect consumption tax reforms, incentives for buying big-ticket items, additional fiscal and infrastructure spending and a RRR cut. We maintain our 7.7 percent growth forecast for 2013," wrote analysts at Credit Agricole in a research note.