The U.S. dollar held firm, and gold hovered near record levels while oil extended gains for a third straight session amid worries of oil supply disruptions in the U.S. and Russia.

Japanese markets ended slightly lower after the release of mixed economic data, with exports rising 7.2 percent year-on-year in January while core machinery orders, a key indicator of capital spending, unexpectedly declined in December.

The Nikkei average dipped 0.27 percent to 39,164.61 as policy board member Hajime Takata called for gradual rate hikes to mitigate the risk of rising prices and financial market overheating. The broader Topix index settled 0.30 percent lower at 2,767.25.

Automakers Toyota, Honda Motor and Nissan fell around 2 percent each. Tech heavyweight SoftBank dropped 1.9 percent and Uniqlo operator Fast Retailing gave up 2.1 percent.

On the positive side, Advantest rose about 1 percent and Tokyo Electron jumped 3.5 percent.

Japan posted a merchandise trade deficit of 2.758 trillion yen in January, the Ministry of Finance said on Wednesday. The total value of core machinery orders in Japan was down a seasonally adjusted 1.2 percent on month in December, the Cabinet Office said on Wednesday - coming in at 889.3 billion yen.