In Australia, energy stocks traded in the red given the fall in oil prices, with oil and gas producer Santos closing down by 2.01 percent. Major banking stocks were also under pressure, with National Australia Bank declining 2.94 percent and ANZ down by 1.79 percent.
In Japan, Toshiba announced it would be selecting a consortium led by the Innovation Network Corporation of Japan as a preferred bidder for its flash memory unit. The consortium consists of the INCJ, Bain Capital Private Equity and the Development Bank of Japan. Toshiba shares closed 2.18 percent lower at 323 yen a stock.
The dollar traded at 97.747 against a basket of rival currencies, after trading as high as 97.871 in the previous session. Against the yen, the dollar traded at 111.18, off a high of 111.50 seen earlier.
The British pound traded at $1.2606 after falling as low as $1.2617 overnight. Pound sterling fell to a two-month low after Bank of England Governor Mark Carney said the central bank would not be raising interest rates anytime soon due to uncertainty surrounding Brexit.
Markets are also parsing through mixed signals from Fed speak overnight. Chicago Fed President Charles Evans told CNBC the central bank could wait until year-end before making a decision on increasing interest rates. Boston Fed President Eric Rosengren sounded more hawkish, saying that low interest rates meant policy would be "less capable of offsetting negative shocks." Rosengren is not a voting member of the FOMC.
The Bank of Japan's minutes for its June meeting reflected that the central bank said the level of government bonds it purchases could fluctuate but this was unlikely to affect guidance, Reuters said. The minutes also showed the BOJ remained cautious on the 2 percent inflation target.
Major indexes on Wall Street closed lower as energy stocks were pressured by the fall in oil.
— CNBC's Saheli Roy Choudhury contributed to this report.