Singapore shares snapped two straight sessions of gains on Wednesday with financials leading the decline, while Vietnam stocks slumped 2 percent to an eight-month closing trough.

Broader investor sentiment was low as U.S. threats of tariffs on an additional $200 billion worth of Chinese goods pushed the world's two biggest economies ever closer to a full-scale trade war.

Singapore's FTSE Straits Times Index closed 0.8  percent lower, with Oversea-Chinese Banking Corp and DBS Group Holdings shedding 2 percent and 1.1 percent, respectively.

"If overall regional and China-centric trade flows decline, the Singapore economy will likely take a hit due to its dependence on trade and manufacturing activities," OCBC Bank said in a note.

Vietnam shares extended losses into a third session with financial services provider Vietcombank closing 3.6 percent lower.   

Thai shares snapped three consecutive sessions of gains and closed 0.4 percent lower. PTT Public Co fell 0.5 percent and Airports of Thailand dropped 1.2 percent.

Philippine shares rose 1.4 percent to a one-week closing high with industrials at the helm.

"Despite Philippine's trade exposure to China and U.S. being relatively high, given that a majority of the country's growth is fuelled by domestic consumption, it is less susceptible to trade fluctuations as compared to other ASEAN countries," OCBC Bank added.

SM Investments climbed 4.2 percent, while Ayala Land gained 2.1 percent.

Malaysian shares erased early losses to close marginally higher.

Earlier in the day, the central bank kept its key interest rate at 3.25 percent at its first policy meeting under the newly appointed central bank governor.

Indonesian shares closed 0.2 percent higher with Astra International being the biggest boost.    

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