Japan's benchmark index suffered a second consecutive steep fall on Thursday after the previous day's 4 percent tumble as the yen rose, while the rest of Asia ended mixed following China's upbeat trade figures.
China's benchmark index hovered near the 2,050 mark, trading 20 points within sight of a new three-week high after data showed Chinese exports jumped 5 percent in July while imports surged 10 percent, beating market forecasts for a 3 and 2 percent rise, respectively.
The data is a welcome surprise from June's contraction and entrenched the positive mood created by the last month's official Purchasing Managers' Index (PMI) data. A raft of further data is expected on Friday, including inflation, industrial output, fixed-asset investment and retails sales data.
"Obviously the numbers are quite good but if you look at in context, I think the numbers only brings it back to where they were back in April. It suggests to me a return to a trend, I don't think it's much of a bounce just a return to normal conditions I would say," said Alistair Chan, economist at Moody's Analytics.
(Read more: China market bounce: trend change or false alarm?)
Brokerages weighed on the index with 1 percent declines in CITIC Securities, Haitong Securities and China Merchants Securities.
Nikkei down 1.6%
Japan's benchmark index closed at its lowest levels since July, extending the previous day's 4 percent tumble as dollar-yen traded near a seven-week low of 96.15.
(Read more: Is the best trade of2013 losing its luster?)
The index reversed gains in afternoon trade following it's earlier 1 percent spike after the Bank of Japan (BOJ)'s decision to leave monetary policy unchanged at the conclusion of its two-day meeting. Investors are hoping BOJ chief Haruhiko Kuroda will provide relief to markets by talking down the stronger yen when he speaks at a press conference later today.
"There are no downside risks emerging - inflation has developed with expectations while long-term interest rates have been very stable so the BOJ has been successful in restoring its credibility," said Masayuki Kichikawa, chief Japan economist at Merrill Lynch Japan Securities.
Market heavyweight Softbank and Fast Retailing lost over 2 percent each while exporter stocks gave up their gains. Robotics maker Fanuc fell 1 percent after rallying 2 percent earlier, Isuzu Motors skidded over 4 percent.
In earnings news, tractor maker Kubota added 1.6 percent after reporting a 92 percent rise in quarterly net profit but Sumitomo Rubber Industries lost nearly 7 percent after posting a 7.9 percent fall in first-half operating profit.
Mixed economic data also weighed on the index. June's current account balance dropped by a worse-than-expected 20 percent on an annual basis, but bank lending in July rose 2 percent from a year earlier.
Australia up 1%
Australia's benchmark index moved off the previous day's two-week low to near the 5,100 mark after better-than-expected trade data from China, Australia's largest export market. The upbeat data also saw the Australian dollar jump 1 percent to rise above 90 U.S. cents.
Miners reversed the previous day's sharp declines after copper prices hit a seven-week high on the back of strong Chinese demand. Mount Gibson surged over 8 percent, Atlas Iron jumped 5.8 percent while heavyweight Rio Tinto added 1.3 ahead of reporting first-half earnings after the market close.
The nation's biggest phone company Telstra rallied 2.4 percent after reporting a 13 percent jump in full-year net profit.
Weak employment data capped larger gains on the index. The economy lost more than 10,000 jobs in July, compared to June's addition of 10,300 jobs. Analysts said the worse-than-expected results were due to the slowdown in the mining sector but weren't weak enough for further support from the Reserve Bank of Australia.
"While the jobs number was soft, on its own its not enough to bring on another RBA rate cut,particularly given the rise in hours worked that was also reported for July," said Shane Oliver, head of investment strategy and chief economist at AMP Capital.
Kospi 0.3% higher
South Korea's benchmark index was largely unchanged after the Bank of Korea left its policy rate unchanged for a third straight month, as widely expected.
Exporter stocks got a boost from the stronger Japanese currency, helping the benchmark rise above Wednesday's two-week low of 1,878. Chip makers rose with Samsung SDI leading by 2 percent.
"We have raised our Kospi target from 1,850 to 1,950. We have made no changes to our beta-neutral model portfolio, but would use any further weakness to add risk. We see a true recovery in the second half of 2014," wrote analysts at CLSA in a note.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC