Australia's share market pared gains after the Reserve Bank of Australia (RBA) left rates on hold at 2.5 percent, a widely expected decision following last month's 25 basis-point cut. The index dropped below the 5,200 mark but still ended at its highest levels since May 22 while the Australian dollar rose above 90 U.S. cents.
Caution ahead of federal elections this weekend capped further gains.
"Whatever happens this Saturday, it is unlikely that Monday morning will see a scorch earth or grass is greener moment. The markets are more likely to react to the Fed meeting, German elections and the fact that the Syrian conflict is still simmering away under the surface. This election from a market perspective is a non-event," wrote Evan Lucas, market strategist at IG in a note.
Resource stocks rallied after the RBA's index of commodity prices climbed to a fifteen month peak in August. Mining giants Rio Tinto climbed 3 percent while Fortescue Metals ended nearly 5 percent higher.
But retailers weighed on the index after retail sales grew slower-than-expected in July. Wesfarmers and David Jones lost over 1 percent each.
Kospi adds 0.4%
South Korea's benchmark index also pared gains after hitting its 200-day simple moving average (SMA) of 1,940 points. Still, the index closed at its highest levels since August 2 thanks to strong gains in shipbuilders.
STX Offshore and Shipbuilding surged 15 percent while Hyundai Mipo Dockyard jumped over 5 percent.
But automakers weighed on the index on news of another strike by Hyundai Motor's union workers. Hyundai Mobis fell 1.6 percent while Hyundai Motor slipped 0.8 percent.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter