Japanese stocks outperformed on Wednesday on hopes that Prime Minister Shinzo Abe will unveil details on key reforms while the rest of the region was subdued before the Federal Reserve's policy outcome.
The U.S. central bank will release a policy statement around 11pm SIN/HK (7pm GMT) upon the conclusion of its two-day meeting, followed by a news conference by Chairman Bernanke. A spate of upbeat economic data in recent weeks, including low inflation, have supported the view that conditions are adequate for an early reduction in bond purchases.
"If they don't taper in this meeting they will give a strong indication of a taper in the January or March meeting. Thus, on this point alone, a failure to move shouldn't cause too much of a reaction in the markets, as long as the chairman gives a strong indication it is coming," said Evan Lucas, market strategist at IG.
(Read more: What the Fed meeting could mean for the dollar)
Nikkei soars 2%
Japan's benchmark Nikkei index closed at its highest level in over a week after rumors surfaced that Prime Minister Shinzo Abe may flesh out growth strategies related to highly-anticipated structural reforms at a scheduled speech on Thursday.
(Read more: Here's why the Nikkei is surging today)
Strong foreign buying also underpinned gains. A fund manager survey from Bank of America Merrill Lynch showed global investors increased their Japan equity allocation to 34 percent in December from 24 percent last month.
Meanwhile, exports rose for a ninth straight month in November, while the trade deficit came in at a smaller-than-expected $12.56 billion.
India jumps 1.3%
India's benchmark index shot up while the rupee rose to 62 per dollar after the Reserve Bank of India left interest rates unchanged at 7.75 percent on Wednesday, defying expectations of a hike after the inflation rate surged in November.
"Very few [people] expected an unchanged decision. Maybe, and I'm speculating here, it was due to a huge decline in the rupee we saw recently, which then fed into imported inflation. Maybe with the rupee stabilizing, they [RBI] are saying to themselves maybe inflation will stabilize so let's wait and see before reacting," said Sani Hamid, director of wealth management, economy and market strategy at Financial Alliance.
Shanghai 0.1% lower
China's benchmark Shanghai Composite index closed at a new one-month low for a third consecutive session on fears of tight liquidity.
Rising money market rates were in focus after the seven-day repo rate rose over 6 percent to its highest level since June after the People's Bank of China skipped open market operations in the past four sessions:
New home prices hit a fresh record growth rate in November, despite repeated measures by Beijing to cool the red-hot property sector. That sparked modest gains amid property developers; China Merchants Property and Gemdale inched up 0.2 percent each.
Sydney dips 0.1%
Australia's benchmark S&P ASX 200 index traded in a narrow 22-point range as investors focused on comments from central bank governor Glenn Stevens.
In his twice-yearly parliamentary testimony, Stevens addressed the success of past interest rate cuts and warned that an Australian dollar above 90 U.S. cents was not suitable for the economy. That saw the currency hover near Tuesday's five-month low of $0.8879.
Qantas closed 0.5 percent higher following an earlier 1 percent rally on reports that it is close to deal with the government for the provision of a standby debt facility, according to the Australian Financial Review.
Kospi up 0.4%
South Korean shares hit a one-week closing high thanks to strong foreign buying. Foreign investors bought $13 million worth of local shares near mid-session, Thompson Reuters reported.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter