In company news, Toshiba held its annual meeting on Wednesday. Toshiba had promised to sign a deal for the sale of its memory chip unit by the meeting, but said in a statement released earlier in the day that the "negotiation is still continuing." Toshiba had selected a consortium led by the Innovation Network Corporation of Japan as its preferred bidder. Toshiba shares fell 1.84 percent to close at 287.6 yen a stock.
Meanwhile, Western Digital and KKR & Co. submitted a fresh offer for Toshiba's memory unit. The chief of Toshiba's memory chip business said Western Digital's offer had anti-monopoly issues, Reuters reported. Western Digital jointly operates Toshiba's main chip plant and had sought to block the sale of the latter's chip business.
Takata shares tumbled to close down 68.18 percent after the Tokyo Stock Exchange removed daily price limits for the company's shares. The company filed for bankruptcy earlier this week.
Several small-cap stocks in Hong Kong extended losses, with some falling more than 90 percent in the previous session. The broader Hong Kong Exchange Growth Enterprise Market (GEM) Index, which the stocks traded on, was down by 1.59 percent at 2:53 p.m. HK/SIN.
A significant number of companies that plunged on Tuesday, including GreaterChina Professional Services and China Jicheng, had appeared in a list of Hong Kong-listed stocks not to own published in May by an activist investor.
Oil prices gave up some gains after rising almost 2 percent overnight. Brent crude slipped 0.24 percent to trade at $46.54 a barrel and U.S. crude traded lower by 0.43 percent at $44.05.
In currencies, the dollar index, which tracks the dollar against a basket of rival currencies, slid to trade at 96.284, below the 97 handle seen for the last two weeks.
The greenback also ceded ground against the yen after hitting a five-week high earlier in the session. The dollar/yen traded at 112.32 at 2:50 p.m. HK/SIN.
U.S. stocks closed lower on Wall Street following the Senate's decision to postpone voting on a new health-care bill. Technology stocks also fared poorly, with Alphabet falling by more than 2 percent. The EU fined Alphabet unit Google a record $2.7 billion, as regulators ruled the company violated antitrust rules.