Amid the latest round of dialogue between the two countries in Shanghai, China's foreign ministry blamed the United States for flip-flopping in bilateral trade negotiations over the past year, after Trump accused Beijing of waiting out his current presidential term to strike a trade deal.

The US Federal Reserve's policy decision is due later in the day, where a 25 bps point cut is all but insured. However, the market is anxiously eyeing whether the central bank will leave the door open for further policy easing.  "The mini roller coaster ride is expected to continue as the two competing narratives, the dovish Fed and trade war doubts jockey for position ahead of FOMC," said Stephen Innes, managing partner at VM Markets Pte.

Singapore shares, which are extremely sensitive to developments in the US-China trade war, closed at their lowest in a over a month amid broad-based losses.

Shares of industrial conglomerate Jardine Matheson Holdings Ltd were among the biggest drag on the index.

For July, the index ended 0.5% lower.

Manufacturers in the city-state are facing the doldrums, which clearly reflects an erosion of business confidence as global trade tensions persist, OCBC said in a note, and added that it expects the third-quarter to remain challenging for the sector.

Philippines saw its worst trading session in over two months on weakness in real estate stocks, but managed to log fifth straight monthly gain.

Property developer SM Prime Holdings and Ayala Land Inc shaved over 2.5% each, while a fall in electricity retailer Aboitiz Power Corp's shares after poor second-quarter results also pressured the main board.

Meanwhile, Vietnam shares rose 0.6% to snap a streak of three monthly losses in a row.

Upbeat second-quarter earnings of Vietnam's largest listed firm Vingroup JSC and state-run lender Vietinbank aided the main board.

Thai shares inched up after it clocked a trade surplus of $4.4 billion for June, but ended the month 1.1% lower.

The Indonesian benchmark closed little changed.