Resource stocks, including energy firms and the major miners, were also hurt, following a broad selloff in commodity prices led by oil, which slid below $90 a barrel on Tuesday after snapping a four-day rally to a record high of $93.80.
Oil and gas producer Woodside Petroleum, mining giant BHP Billiton, Japanese oil developer INPEX Holdings and South Korea's zinc producer Korea Zinc all declined.
The Nikkei 225 Average closed higher after stocks picked up some steam towards the end of trade as Fujifilm Holdings jumped after lifting its full-year forecasts, but investors remained reluctant to take big positions throughout the day ahead of the Federal Reserve's decision on interest rates. Another bright spot was Sapporo Holdings. Shares in Japan's third-biggest beer maker surged to their daily limit
after it said Morgan Stanley planned to take up to a 5 percent stake and work with it in the real estate business.
South Korea's KOSPI rose to a record close as display maker LG.Philips LCD soared to a two-year high on market expectations for strong profits, while brokerage Mirae Asset hit a peak on robust quarterly results.
Australian shares ended little changed, with falls in resource sector shares offset by gains in banks counters which got a lift when St George Bank's results met analysts forecasts.
Hong Kong stocks finished lower by 0.9 percent, with China plays leading the decline, as concern over the U.S. Federal Reserve rate decision prompted investors to sell mainland lenders and other top gainers after a record-setting rally. Blue chips edged down as property shares retreated further on rate-cut uncertainties. Resource issues also fell as crude prices continued to decline.
Singapore's Straits Times Index closed slightly higher, but shares of South Korean shipping firm STX Pan Ocean fell more than 12 percent after the Baltic dry index pulled back from a rally this week to record highs. The Baltic Exchange's dry freight index, which gauges the strength of seaborne trade for dry commodities such as coal, iron ore and grains, began breaking records in May, driven by demand for natural resources in China and India and a lack of ships.
Chinese stocks rose for the fourth straight day as the final batch of funds frozen by PetroChina's IPO was returned to investors, though the main index came well off its intra-day high, suggesting the rebound was losing steam.