China's yuan hit a two-week low against a broadly stronger U.S. dollar on Wednesday, breaching the key 6.7 per dollar level and leading to speculation that the currency's weakness is not seen as a problem by Chinese officials.

Property firms, whose values are linked to foreign interest in yuan assets, fell over 2 percent, while airliners, which are burdened with heavy dollar borrowings, also dropped. The blue-chip CSI300 index was down 0.5 percent, with its financial sector sub-index trading 0.53 percent lower; the consumer staples sector was down 0.82 percent; the real estate index was 2.08 percent weaker while the healthcare sub-index edged up 0.18 percent.

The smaller Shenzhen index ended down 0.75 percent and the start-up board ChiNext Composite index was weaker by 0.85 percent. Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.06 percent while Japan's Nikkei index closed up 0.43 percent.

According to Pacific Investment Management Co., the Chinese Central Bank will most probably not restrict the exchange rate as the currency is set to moderately depreciate amid ongoing trade tensions with the United States.

"Market concerns resulting from uncertainty such as a trade war continue to weigh on sentiment," Bloomberg cited Gao Qi, a Singapore-based foreign exchange strategist at Scotiabank, as saying. "Investors will keep pushing the yuan to 6.8 per dollar. The PBOC will step in, if one-sided depreciation pressures are seen."

Previously, a senior official at the People's Bank of China backed the currency as the yuan retreated to similar levels earlier this month, suggesting that the currency would be "kept stable" and not be used in the trade dispute as a weapon.

At 07:21 GMT, the yuan was quoted at 6.7127 per U.S. dollar, 0.14 percent weaker than the previous close of 6.7035. The top percentage gainers in the main Shanghai Composite index were Huafang Co Ltd, up 10.12 percent, followed by Founder Technology Group Co Ltd, up 10.04 percent and Zhenhai Petrochemical Engineering Co Ltd , up 10.04 percent.

The top percentage losers in the Shanghai index were Henan Oriental Silver Star Investment Co Ltd, down 10 percent, followed by Veken Technology Co Ltd, down 7.82 percent and Shenma Industry Co Ltd, down 7.54 percent.

So far this year, the Shanghai stock index is down 15.7 percent, the CSI300 has fallen 14.9 percent while China's H-share index listed in Hong Kong is down 9.7 percent. Shanghai stocks have declined 2.07 percent this month.

About 12.10 billion shares were traded on the Shanghai exchange, roughly 93.3 percent of the market's 30-day moving average of 12.97 billion shares a day. The volume in the previous trading session was 10.54 billion.

As of 07:21 GMT, China's A-shares were trading at a premium of 18.39 percent over the Hong Kong-listed H-shares. The Shanghai stock index was below its 50-day and 200-day moving averages. The price-to-earnings ratio of the Shanghai index was 12.08 as of the last full trading day while the dividend yield was 2.7 percent.