The benchmark Nikkei 225 index fell 0.86 percent or 187.04 points to 21,522.27 in early trade while the broader Topix index was down 0.80 percent or 12.54 points at 1,563.04.

Investor sentiment was dampened after Trump accused China of going back on commitments as the two sides returned to the negotiating table for trade talks in Shanghai.

"It is certainly not a great look as US trade negotiators enter a second day of negotiations in Shanghai," said Rodrigo Catril, strategist at National Australia Bank.

"The only positive thing we can say for now is that the two parties are still willing to carry on talking... but expectations of a compromise are very low with Chinese media stressing the need for the US to meet China 'half way'," he said in a commentary.

Market players were also cautious ahead of a key Federal Reserve decision.

The US central bank is expected to cut interest rates at a two-day monetary meeting that began on Tuesday but investors are not sure how big the cut will be.

The dollar was trading at 108.58 yen in early Asian trade, little changed from New York on Tuesday afternoon.

In individual stocks trade, Sony soared 6.51 percent to 6,241 yen after the entertainment giant on Tuesday reported higher operating profit for the first quarter thanks to strong demand for its image sensors.

Nintendo lost 2.24 percent to 39,680 yen after it reported its first-quarter net profit dived 46 percent due to exchange rate losses.

Panasonic was down 0.34 percent at 921.5 yen as it was set to announce results after the market closes on Wednesday.