This is CNBC's live blog covering Asia-Pacific markets.

Asia-Pacific markets saw sharp losses after minutes from the U.S. Federal Reserve revealed that the central bank was split on its decision to pause its rate hikes in June and sees more hikes ahead at a slower pace.

Officials said that a brief pause in the Fed's tightening cycle would give the committee time to assess the impacts of the hikes, the most aggressive moves since the early 1980s.

Hong Kong's Hang Seng index led losses in the region, dipping 3% in its final hour of trade. In mainland China, the Shanghai Composite was down 0.54% to close at 3,205.57 and the Shenzhen Component lost 0.55% to 10,968.37.

U.S. Treasury Secretary Janet Yellen kicks off her visit to Beijing this week, where she is expected to meet with senior officials in China. This comes after China on Wednesday unexpectedly canceled EU High Representative for Foreign Affairs Josep Borrell's visit to China.

In Japan, the Nikkei 225 fell 1.7% to 32,773.02 and the Topix shed 1.3% to 2,277.08. In South Korea, the Kospi dropped 0.88% to close at 2,556.28 while the Kosdaq fell 2.32% to 870.52. In Australia, the S&P/ASX 200 slid 1.27% to end its session at 7,161.1.

In Southeast Asia, Malaysia's central bank is expected to hold its overnight policy rate steady at 3%, according to a Reuters poll.

Overnight in the U.S., markets ended lower after the Fed minutes, with the Dow Jones Industrial Average slipping 0.38% and the S&P 500 dropping 0.2%. Both indexes snapped three-day winning streaks, and the Nasdaq Composite slipped 0.18% to round off the losses in the three indexes.

— CNBC's Sarah Min and Alex Harring contributed to this report

Malaysia holds rates at 3%, in line with expectations

Malaysia's central bank has held its overnight policy rate at 3%, in line with expectations from economists polled by Reuters.

The current rate marks the highest the benchmark rate has been since November 2019. The central bank noted that the country's headline inflation has continued to ease amid lower cost factors.

It added that while Malaysia's core inflation has also moderated, "it remains elevated relative to the long-term average amid lingering demand and cost factors."

Headline inflation for Malaysia came in at 2.8% in May, while core inflation — which excludes more volatile food and fuel prices — stood at 3.5%.

— Lim Hui Jie

Hong Kong shares of Chinese banks fall on Goldman downgrades

Hong Kong-listed shares of Chinese banks were among the leading decliners in the Hang Seng index after Goldman Sachs reportedly downgraded its ratings for the top mainland lenders.

Goldman Sachs lowered its rating for Agricultural Bank of China to "sell" from "neutral," as well as downgrading Industrial and Commercial Bank of China and Industrial Bank from "buy" to "sell," Reuters reported.

Hong Kong listed shares of Agricultural Bank of China dropped nearly 2% while ICBC fell 2.4%. Bank of Communications fell 1.54%.

The report added that Goldman cited investor concerns over the the banks' exposure to local government debt, earnings risk as well as diverging fortunes among individual banks.

— Jihye Lee

Australia's May trade surplus climbs more than expected

Australia's trade surplus for June came in at 11.79 billion Australian dollars in May, higher than the AU$11.15 billion recorded in April.

The figure also beat expectations of economists polled by Reuters, who expected the surplus to decline to AU$10.5 billion.

Government data showed that imports of goods and services into Australia increased by 2.5% month on month in May, while exports climbed 4.4%.

— Lim Hui Jie

Foxconn sales dip by 14% in second quarter, but outlook brighter for third quarter

Shares of electronics manufacturer Foxconn fell 0.92% after the company posted a 14% drop in sales for the second quarter, compared to the the same period a year ago

Sales for Foxconn, also known as Hon Hai Precision Industry, came in at 1.3 billion New Taiwan dollars ($41.76 billion) in the second quarter.

However, the company is more optimistic about the year ahead, saying that "with the second half of the year peak season currently underway, operations will gradually ramp up."

Third quarter sales are expected to increase at a compared to the second quarter, and Foxconn said that when compared to the pre-pandemic period, the growth rate is expected to be approximately on par.

— Lim Hui Jie

Malaysia's central bank expected to hold rates steady

Malaysia's central bank is expected to hold its benchmark overnight policy rate steady at 3%, economists polled by Reuters showed.

Bank Negara Malaysia previously raised its rates by 25 basis points from 2.75% in its May policy meeting.

The economy's consumer price index rose at a slower-than-expected pace of 2.8% in June after peaking near 5% in August last year.

— Jihye Lee

CNBC Pro: Investors are 'too complacent': Deutsche Bank strategist names two ways to hide from a potential downturn

Investors have become "too complacent" in the calm before a potential storm for stock markets, according to Deutsche Bank's Maximilian Uleer.

Uleer, head of European equity and cross-asset strategy at the multinational German lender, said the historically low levels of volatility was a key concern since it signaled rising complacency within the market.

The strategist also named two ways investors could "cheaply" insulate themselves from a potential downturn.

CNBC Pro subscribers can read more here.

— Ganesh Rao

CNBC Pro: These funds outperformed in the first half of the year — and here are their favorite stocks

Here are the top performing, actively managed equity funds in the first half of the year, according to data from Morningstar.

CNBC Pro also highlighted the stocks most commonly in the top holdings of these funds, with potential upsides and buy ratings, according to FactSet.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Fed minutes show central banks expects more rate hikes

The Federal Reserve expects to raise rates further from current levels, albeit at a slower-than-expected pace, a summary from the central bank's June meeting showed.

"Many [officials] also noted that, after rapidly tightening the stance of monetary policy last year, the Committee had slowed the pace of tightening and that a further moderation in the pace of policy firming was appropriate in order to provide additional time to observe the effects of cumulative tightening and assess their implications for policy," the minutes said.

— Fred Imbert, Jeff Cox

Odds that Fed will raise base rate a quarter point in less than 3 weeks are even more of a certainty

The odds that Federal Reserve policymakers will raise their benchmark overnight lending rate another quarter point, to 5.25%-5.50%, at their next meeting on July 26 climbed even closer to a sure thing following the release Wednesday of the minutes from their June meeting, according to the CME FedWatch Tool.

As of mid-afternoon Wednesday, the probability the Fed will go in July climbed to 88.7%, up from 81.8% a week ago,  according to interest rate traders. The odds that rates will be left unchanged fell to 11.3% from 18.2% last week.

Almost three quarters, or 73.2%, of interest rate traders think the fed funds rate will stand at 5.25%-5.50% by the conclusion of the September 20 Federal Open Market Committee meeting, up from 69.1% last week. Odds that rates will stand a half point higher, at 5.50%-5.75%, by the end of the September meeting are now 17.7%, little changed from 16.4% a week ago.

— Scott Schnipper

Fed sees improving odds for a soft landing, minutes show

Federal Reserve officials still have a recession as the most likely base case for the U.S. economy, but there was growing optimism at the last meeting that a true "soft landing" could be achieved.

"Given the continued strength in labor market conditions and the resilience of consumer spending, however, the staff saw the possibility of the economy continuing to grow slowly and avoiding a downturn as almost as likely as the mild-recession baseline," the minutes said.

— Jesse Pound