Most equity markets in Asia raked in gains on Wednesday, with the exception of Tokyo, bolstered by hopes that the European Central Bank, due to meet on Thursday, may unveil stimulus measures in the form of sovereign bond purchases to boost growth.
Meanwhile, the Bank of Japan (BOJ) maintained its massive monetary stimulus and expanded a loan program aimed at encouraging banks to boost lending, signalling its resolve to achieve its ambitious 2 percent inflation target. The central bank's governor Haruhiko Kuroda is due to hold a news conference in the afternoon to explain the policy decision.
Read MoreWall Street debates implications of crude's drop
Overnight, U.S. stocks ended higher after wavering between positive and negative territories, as investors tracked the price of oil and fourth-quarter earnings from corporations including Johnson & Johnson. The fell as much as 164 points, and bounced back to close flat. The added 0.2 percent while the tech-heavy Nasdaq settled 0.4 percent higher.
Keeping an eye on oil, U.S. crude futures edged up on Wednesday following steep losses a day earlier but remained below $47 a barrel amid worries over sluggish demand after the International Monetary Fund cut its 2015 global economic forecast. London Brent crude for March delivery was untraded yet, after settling down 85 cents at $47.99.
Nikkei drops 0.5%
A stronger currency, coupled with the BOJ's announcement, weighed on Japan's benchmark Nikkei 225 index on Wednesday.
The yen strengthened more than 1 percent against the U.S. dollar to trade above the 118 handle on late Tuesday, dragging exporter stocks lower. Panasonic led declines with a nearly 3 percent loss, while Sharp and Suzuki Motor lost 2.6 and 2.1 percent each. Toyota Motor fell 1 percent.
Index heavyweights Softbank and Fast Retailing, owner of clothes brand Uniqlo, retreated 1 percent each.
Kospi gains 0.2%
South Korean shares erased losses in the last hour and closed at a one-week high, encouraged by brisk performances across the region. Hyundai Motor, the second heaviest weighted stock on the Kospi index, trimmed losses to 1.2 percent while steelmaker Posco drifted 0.4 percent lower.
Energy and utility stocks recovered in the afternoon session, with Kepco and SK Innovation rebounding nearly 2 percent each. Korean Air bounced back 0.6 percent on news that its affiliate Hanjin Energy has sold all of its stake in South Korean refiner S-Oil to Aramco Overseas Company, a unit of Saudi Arabia's state oil firm.
Read MoreChina faces biggest fiscal challenge since 1981
Mainland indices up
China's benchmark Shanghai Composite index widened gains in the afternoon session to pile on nearly 5 percent as brokerages rebounded after suffering steep losses in the previous sessions due to a crackdown on margin financing. Haitong Securities rose by the daily limit of 10 percent, while Founder Securities and Citic Securities piled on over 7 percent each.
"Equities in China are experiencing a good recovery after yesterday's data essentially quashed fears of a hard landing," Stan Shamu, IG's market strategist, said. "Focus shifts to the 2015 growth target in March, which will essentially give us an idea of how aggressive Chinese policymakers will act this year or whether they will press on with reforms."
Among top gainers, China Life Insurance, China Pacific Insurance and China Merchants Bank also rose by the maximum allowable 10 percent, respectively. Spring Airlines began its debut in Shanghai on a positive note, with shares of the Chinese budget carrier jumping 44 percent to 26.15 yuan, compared with its issue price of 18.16 yuan.
Meanwhile, Hong Kong's Hang Seng index rose 1.6 percent to hit a near one-week high.
ASX rises 1.6%
Australia's key S&P ASX 200 index closed at a one-week high on Wednesday, while the Australian dollar shot up 0.6 percent to buy $0.8219 to the dollar.
Gold producers led gains, with Evolution Mining and Newcrest Mining rising 6.2 and 4.1 percent as spot gold climbed to a fresh five-month high on Wednesday. Among miners, BHP Billiton added 2 percent after it announced a cut in its shale drilling spending over the next six months as it looks to meet its promise not to cut dividends in the face of a collapse in iron ore, copper and oil prices.
Meanwhile, a survey by the Melbourne Institute and Westpac Bank showed Australia's consumer sentiment rebounded in January as sharp falls in petrol prices and better news on employment left people more ready to splurge on major items. Retailers were broadly higher on the news; Myer and Harvey Norman escalated over 1 percent, respectively, but JB Hi-Fi crept down 0.6 percent.
Read MoreOil crash a saving grace for Australian miners
Meanwhile, the World Economic Forum in Davos kicks off today with the spotlight firmly on the European Central Bank and the weakness in the euro zone economy.