Middle east turmoil
Fears of U.S. military action against Syria fueled a rush out of equities overnight. Wall Street suffered its worst day since June, sending the Dow to a two-month closing low while European stocks saw their biggest daily drop in two months.
U.S. Defense Secretary Chuck Hagel told the BBC the U.S. military is "ready to go" if President Barack Obama orders action over a chemical weapons attack in Syria, while NBC News reported the U.S. could launch a missile strike against Syria "as early as Thursday."
(Read more: Allies draft plans for strikes against Syria)
Nikkei drops 1.5%
Japanese stocks crossed the 13,300 mark to retreat from an earlier two-month low as the yen strengthened beyond the 98 level against the dollar. Despite paring losses, the index still closed down at a one-week low.
Automakers led the declines with Mazda Motors and Mitsubishi Motors lower by over 3 percent each while Suzuki Motors fell 5.5 percent.
Other exporters weighed on the index with consumer electronics maker Sony down by 3.4 percent and Nintendo falling 3 percent.
Sydney 1% lower
Australia's resource-heavy benchmark index hit a three-day low, tracking Asia-wide declines.
Global miners BHP Billiton and Rio Tinto fell over 2 percent each while Fortescue Metals lost over 4 percent
In earnings news, iron ore miner BC Iron closed up nearly 6 percent after a 41 percent rise in full-year underlying profit while Transfield climbed 11 percent despite posting a net loss.
AGL Energy rallied 5 percent after reporting a 30 percent rise in full-year revenue while supermarket giant Woolworths rose 2 percent after posting a 3.3 percent rise in annual profit.
China's benchmark index bounced between gains and losses in afternoon trade after hitting a one-and-a-half-week high at the 2,112 mark thanks to rally in gold miners.
Shangdong Gold and Zhongjin Gold surged 10 percent each as gold prices traded near the previous day's three-month high.
Airlines also capped heavier losses on the index with Air China up 1.2 percent after posting a 9.7 percent increase in first-half net profit. China Eastern rallied nearly 6 percent while China Southern rose nearly 2 percent.
South Korean equities pared losses after hitting a three-day low earlier in the session. Sentiment was lifted after the Bank of Korea's manufacturing business survey index for September rose to its strongest reading in three months.
Blue-chip stocks erased earlier losses. Samsung Electronics rose 0.4 percent following an initial 1 percent decline while Hyundai Motor and Kia Motors ended 1 and 2 percent higher, respectively.
Emerging market stress
Philippines' stock index closed down 3 percent following Tuesday's 4 percent sell-off while Indonesia's Jakarta Composite dropped 1.2 percent. Thailand's SET Index lost over 2 percent at one point before closing down 0.2 percent. Meanwhile, India's rupee plunged over 3 percent to to hit a fresh record low of 68.75 to the dollar.
(Read more: Syria casts 'big black cloud' on emerging markets)
After recent heavy losses, stocks in Indonesia, the Philippines and Thailand are now in bear market territory, down about 20 percent each from their respective May highs.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter