Financials extended losses after data on Wednesday showed bad bank loans rose to their highest level in eight years. Industrial Bank fell 2.5 percent while Pudong Development Bank and Bank of Communications fell over 1 percent each.
Sydney up 0.7%
Australia's S&P ASX 200's index recovered after Wednesday's four-week low thanks to strong gains in banks. Commonwealth Bank of Australia, Australia and New Zealand Banking and Westpac led gains by over 1 percent each after falling on profit-taking in the previous session.
Home builder James Hardie surged 15 percent after announcing first-half profits more than doubled.
Department store David Jones added 5 percent after announcing that UBS become a substantial shareholder.
Seoul rises 0.2%
South Korea's benchmark Kospi rebounded from the the previous day's two-month low after the Bank of Korea left its main policy rate unchanged at 2.5 percent. The central bank said the domestic economy would see a steady recovery trend and expected inflation to remain low for the time being.
Samsung Electronics bounced back from Wednesday's 2.5 percent loss, up 0.3 percent.
Among emerging markets, Indian shares and the Jakarta Composite both finished the session over 1 percent higher.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC