Stocks in Asia slipped on Wednesday as investors awaited the U.S. Federal Reserve's announcement of its decision on interest rates. Meanwhile, markets in Hong Kong closed early as the city braces itself for a tropical storm.
The Nikkei 225 in Japan slipped 0.86% to close at 21,521.53, with shares of index heavyweight Fast Retailing declining 1.96%. The Topix index also fell 0.66% to end its trading day at 1,565.14. Shares of Sony surged 5.31% after the company posted a record first-quarter profit on Tuesday.
Mainland Chinese stocks slipped on the day, with the Shanghai composite shedding 0.67% to 2,932.51 and the Shenzhen component falling 0.77% to 9,326.61. The Shenzhen composite also declined 0.681% to 1,571.30.
Shares of Chinese property developers slipped after comments from a top decision-making body of the ruling Communist Party Tuesday that housing should be "used for living, not for speculation." It also stressed that the real estate sector will not be used as a "short-term means of stimulating the economy."
South Korea's Kospi closed 0.69% lower at 2,024.55. Shares of industry heavyweight Samsung Electronics dropped 2.58% after the company reported a 56% plunge in its second-quarter profit as compared to a year ago.
Over in Australia, the S&P/ASX 200 slipped 0.47% to close at 6,812.60.
Overall, the MSCI Asia ex-Japan index declined 0.68%.
Meanwhile, consumer prices in Australia rose faster than expected in the second quarter, with the headline consumer price index rising 0.6% in the June quarter. That was above expectations of a 0.5% rise by economists surveyed by Reuters.
China's factory activity contracted for the third straight month in July, according to official data released earlier on Wednesday.
The official manufacturing Purchasing Managers' Index (PMI) for July came in at 49.7, according to data from the Chinese statistics bureau. Economists polled by Reuters had expected factory activity in China to edge up to 49.6 from June's reading of 49.4. A PMI reading above 50 indicates expansion, while those below that signal contraction.
U.S. President Donald Trump said in a series of tweets Tuesday that China is not keeping its promise of buying more U.S. agricultural products. For its part, China insists that it has bought U.S. agricultural products.
Trump's comments come as U.S.-China trade talks are happening in Shanghai from July 30 and 31, as the two economic powerhouses aim to reach a deal to end a protracted trade war.
Meanwhile, the Fed is set to deliver its decision on interest rates later Wednesday stateside, with expectations that it will cut interest rates by a quarter point. Investors will also look for clues from Powell about potential rate cuts later this year. Currently, traders are pricing in at least two rate cuts of 25 basis points before the end of the year, according to the CME Group's FedWatch tool.
"The Fed has given us zero reason to expect anything except a quarter point rate cut so the change in interest rates will be the least market moving part of the (Federal Open Market Committee) announcement," Kathy Lien, managing director of foreign exchange strategy, wrote in a note.
"Instead, US dollar traders should be focused on the votes and forward guidance," Lien said.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.034 after slipping from levels above 98.1 yesterday.
The Japanese yen, often seen as a safe-haven currency, traded at 108.55 against the dollar after strengthening from levels above 108.8 in the previous session. The Australian dollar changed hands at $0.6891 after slipping from the $0.690 handle yesterday.
Oil prices rose in the afternoon of Asian trading hours, with the international benchmark Brent crude futures adding 0.87% to $65.28 per barrel and U.S. crude futures gaining 0.69% to $58.45 per barrel.
— Reuters, along with CNBC's Fred Imbert and Huileng Tan contributed to this report.