MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.2%, with relief over a perceived ebb in Ukrainian tensions replaced by caution over the Fed's policy review. Tokyo's Nikkei stock average fell 0.4%.
Global markets have been buffeted in recent weeks by the crisis in Ukraine, slowing growth in China and a mixed economic picture in the United States renewing speculation about the pace of the Fed's stimulus tapering.
That said, business sentiment among Asia's top companies edged up in the first quarter, as solid improvement in the Philippines and South Korea outweighed weakness in China, India and Australia amid persistent concerns over the global economy, a ThomsonReuters/INSEAD survey showed.
The ThomsonReuters/INSEAD Asia Business Sentiment Index RACSI snapped two consecutive quarterly declines and rose to 64 in the first quarter of this year from 62 in the fourth quarter of 2013. A reading above 50 indicates an overall positive outlook.
The Fed is widely expected to continue to reduce the size of its monthly bond purchase program by $10 billion each meeting, but also to alter its forward guidance when it delivers the policy statement on Wednesday, the first policy review to be presided over by new Fed Chair Janet Yellen.
"What will also get a lot of attention is the winter that the United States has just suffered. Some commentators are looking for evidence of recognition from the FOMC that the winter has altered their guidance on the economic recovery -as tapering has been explicitly based on data," Evan Lucas, market strategist at IG in Melbourne, said in a note to clients.
"However, we believe the winter is unlikely to sway its thinking and the current timeline for the unwind of monetary stimulus will remain," he said.
On Tuesday, US stocks climbed for a second straight session, with the S&P 500 in striking distance of its record after comments from Russian President Vladimir Putin that he did not plan to seize other regions of Ukraine were taken as a signal that the crisis may not deepen for now.
But in a reminder that the situation in the former Soviet republics was still volatile, oil prices rose following a report that a Ukrainian serviceman was killed after his base in Crimea came under attack.
Brent crude oil traded at $106.60 per barrel after touching a six-week trough of $105.85 the previous day.
"Excessive disorder in Crimea appears to have been avoided, but it is too early to declare the coast is clear," said Koji Fukaya, president at FPG Securities in Tokyo.
"Going forward, impact on investor risk appetite will depend on whether the crisis turns into a regional issue from a global one. That in turn will hinge on sanctions the European Union and United States impose on Russia, particularly in the energy arena," he said.
The euro stood little changed, with a recent rise in US Treasury yields slightly denting its appeal relative to the dollar and preventing the common currency from extending its 2-1/2-year high of $1.3967 hit last week.
The euro was last steady $1.3925, and against the Japanese yen it was fetching 141.16 yen, largely steady from late New York levels.
The dollar was down about 0.1% on the day at 101.36 yen. The yen showed little reaction to Japan's larger-than-expected trade deficit.
The 10-year US Treasury note yielded 2.670%, having pulled away from a recent trough of 2.610% hit last Friday.
China's yuan traded more than 1% beyond the midpoint set by the central bank, the first time it has traded by such a margin after the daily trading band was widened to 2%.
The yuan opened at 6.1940 per dollar, 20 pips weaker than Tuesday's close of 6.1920. It went as low as 6.1986, an 11-month trough.
A rebound in risk appetite continued to dampen demand for gold. Spot gold was at $1,357.56 an ounce, having slipped from a six-month high of $1,391.76 hit on Monday.
Copper edged up ahead of the Fed's monetary policy meeting later, although persistent worries over growth and credit markets in top-user China capped prices.
Three-month copper on the London Metal Exchange had climbed 0.1% to $6,488 a tonne, extending gains from the previous session.