Indian equities outperformed on Thursday after the nation's new central bank governor unveiled steps to liberalize financial markets, but caution over a reduction in the Federal Reserve's stimulus capped gains in the rest of Asia.
India's Sensex rallied, ending the day 2.2 percent higher, Japan's Nikkei closed at a one-month high and Seoul's Kospi hit a three-month peak. Amid losers, Australia's S&P ASX 200 and Chinese equities dipped 0.4 and 0.3 percent, respectively.
(Read more: Asia stocks go one way, China sure to go the other)
US data, central banks in focus
The U.S. economy expanded at a "modest to moderate" pace between July and August, according to the Federal Reserve's Beige Book. The report, released on Wednesday, could strengthen the case for the U.S. central bank to start pulling back its asset-purchase program.
(Read more: To taper or not: Jobs scrutinized for next Fed move)
Meanwhile, the Bank of England and European Central Bank will announce their decisions later on Thursday. No change is expected in monetary policy from either central bank.
"Admittedly, monetary big guns will not be blazing. But with a strike on a Syria being pushed and taper risks lingering, there may yet be bullets to dodge," wrote Vishnu Varathan of Mizuho Corporate Bank in a note.
India up 2%
India's benchmark index outperformed to hit a three-week high after new central bank governor Raghuram Rajan said on Wednesday that he plans to attract more foreign funds by subsidizing hedging costs for banks. He also said he would push for market liberalization and more rupee trade settlements.
(Read more: RBI's Rajan takes a deep dive to save the rupee)
As a result, the currency rose as much as 2 percent to 65.5 per dollar, its highest level in a week. Banks outperformed with ICICI Bank higher by 7.5 percent while State Bank of India and HDFC Bank increased over 5 percent each.
Japan's benchmark index crossed the 14,060 mark in choppy trade to end at its highest level since August 7 as the yen weakened to one-month low at 99.9 per dollar following optimistic remarks from the Bank of Japan.
The central bank left monetary policy steady, as widely expected but revised up its assessment of the economy, stating the economy was recovering moderately.
"We expect the BOJ to ease policy further in the first part of next year and all in all, that will be yen negative. We expect dollar-yen to reach 105 in 12 months time," said Hamish Pepper, forex strategist, Asia Pacific at Barclays Capital.
Sony closed up 0.8 percent after unveiling its latest device at the Berlin IFA show, a waterproof smartphone with a high-end compact camera.
(Read more: Sony's 'watershed' moment with waterproof phone?)
Shanghai 0.2% lower
China's benchmark index fell on profit-taking after hitting a two-and-a-half week high in the previous session. News that the People's Bank of China drained liquidity for the first time since May also weighed on sentiment.
Shanghai-listed airlines fell on news that Beijing is taking steps to deregulate its domestic and international aviation market, according to Wei Hou, vice president of Hainan Airlines. Hainan slipped 1.5 percent while Air China led losses by over 2 percent.
Property developers were mixed after news of a 34 percent rise in total sales for China's largest real-estate developer, Vanke. Shares closed up 0.3 percent while Gemdale fell 1 percent and Shanghai Shimao lost 2.5 percent.
Sydney at 5,142 points
Trade in Australia's benchmark index was cautious as investors countdown to this Saturday's national elections. The index was little changed after the nation's trade balance swung to a deficit in July.
Major miners like BHP Billiton and Rio Tinto fell as much as 1 percent despite strong resource demand from China. Iron ore exports to the mainland from Port Hedland, one of the world's top terminals for the raw material, rose an annual 33 percent in August.
Seoul 1% higher
South Korea's benchmark index rose above it's 200-day simple moving average of 1,940 points to its highest level since June 7 on robust growth data. The economy grew a seasonally adjusted 1.1 percent in the second quarter compared to the previous three-month period. This marked the fastest quarterly growth since 2011.
Samsung Electronics jumped 2 percent after unveiling its highly anticipated watch-phone, the "Galaxy Gear."
(Read more: Bottom line on Samsung smartwatch: No 'game changer')
But memory chip makers were broadly lower with SK Hynix down 1.7 percent after suspending operations at its China plant due to a fire.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter