With a 25-basis point U.S. rate cut seen as near-certain, investors will look at the Fed's statements for clues on the future policy direction of the central bank.
"In the absence of any surprise in the rate move, investors will be looking at the message from the FOMC in the statement and subsequent press conference," said Nick Twidale, director and co-founder, Xchainge.
"The risk probably sits once again with a hawkish cut and if this comes to fruition, then expect stock markets to take a hit along with risk trades overall."
Thai shares fell 0.6% to their lowest close in two weeks and were the biggest losers in the region as tumbling oil prices pressured the country's energy stocks.
Oil and gas producers PTT PCL and PTT Exploration and Production PCL dropped 3.7% and 4.6%, respectively. Singapore benchmark index <.STI> extended losses to a third straight session as financials faltered.
Malaysian shares <.KLSE> ended at their lowest in over one week as a drop in palm oil prices weighed on producers of the commodity.
Kuala Lumpur Kepong Bhd closed at an over one-month low, while edible oil distributor PPB Group Bhd slipped 1.6%.
Bucking the trend, the Indonesian benchmark index <.JKSE> inched up ahead of a central bank interest rate decision on Thursday.
Bank Indonesia is expected to cut its benchmark rate for the third meeting in a row, to support growth, according to a Reuters poll.
Tobacco company Gudang Garam Tbk PT was among the top gainers as it rose 1.5%, following a 20% slump earlier in the week on a government mandate to slap higher taxes and hike cigarette costs 2020 onwards.
An index of Jakarta's forty-five most liquid stocks <.JKLQ45> was 0.5% higher.
(Reporting by Anushka Trivedi in Bengaluru; Editing by Aditya Soni)
By Anushka Trivedi