Asian stocks traded mostly higher Wednesday, after a flat session on Wall Street.
Market players were, however, reluctant to actively take new positions ahead of the conclusion of the Federal Reserve's two-day policy meeting.
A pledge by the Fed to continue its $600 billion bond-buying plan could bolster the dollar against the yen, as well as equities on hopes for continued liquidity, according to analysts.
In his State of the Union address, U.S. President Barack Obama proposed a freeze on domestic spending over the next five years, a move which was largely expected by markets and which Obama said would help reduce the national deficit.
Japan's Nikkei average dropped on Wednesday, with resource shares losing ground after a rate hike in India and a contraction in Britain's economy led to a pull-back in commodities prices.
Growing concerns over inflation in emerging economies, such as China and India, made both Japanese and foreign investors cautious about taking new positions in stocks ahead of a slew of corporate earnings announcements, pushing down daily turnover to its lowest this year.
Earnings were in focus with Komatsu initially climbing on a report that it is expected to post better-than-expected results for October-December. But Komatsu lost its early gains by late trade to close down 1.1 percent at 2,400 yen.
The drug sector slid on a big setback for Eisai sepsis drug and a report of lax checks at Mitsubishi Tanabe.
Seoul shares advanced on Wednesday, lifted by firm gains in auto and technology issues, including Hyundai Motor and Samsung Electronics.
But shares of LG Electronics ended lower after having fallen as much as 4 percent. The world's No.3 handset maker posted a narrow quarterly loss, but it raised hopes for a much-awaited recovery in its money-losing handset business.
Auto shares rallied, buoyed by positive earnings expectations ahead of a results announcement later this week. Shares in Hyundai Motor, the country's No.1 automaker, and No. 2 Kia Motors both climbed 4.2 percent.
But shipping firms underperformed after Korea Line said late on Tuesday it had filed for receivership, squeezed by a sharp drop in dry-bulk rates and growing global vessel deliveries ordered before the economic turmoil of 2008.
Memory chip makers advanced, with Samsung Electronics, the world's No.1 memory chip maker, up 2.4 percent and Hynix Semiconductor gaining 2.9 percent.
China's main stock index rose in thin trade on Wednesday, led by a rebound in small-cap shares, but turnover shrunk to its lowest in four months as investors continued to worry that Beijing will unleash more policy tightening measures this year to cool inflation.
The benchmark Shanghai Composite Index bounced from a four-month low on Tuesday. The market is now trying to find support above the 2,655-2,677 gap it created last October.
Water companies were the biggest gainers on the Shanghai market after a report said investment in water conservation projects would hit 2 trillion yuan ($303.8 billion) over the next five years.
China Gezhouba Group, builder of the mammoth Three Gorges Dam, bounced 6.2 percent after sliding on Tuesday, while Chongqing Three Gorges Water Conservancy and Electric Power jumped by its 10 percent daily limit.
Hong Kong's Hang Seng Index finished higher boosted by the energy sector, which posted gains on higher oil prices.
Shares in billionaire gaming magnate Stanley Ho's SJM Holdings, the largest casino operator in Macau, ended the day down nearly 5 percent news of a family feud. At one point, during the day, shares were down as much as 8 percent.
Singapore's benchmark Straits Times Index ended up 1.3 percent, with GMG Global climbing as much as 8.8 percent after Merrill Lynch initiated coverage of the firm with a "buy" rating with a target price of S$0.50.
Merrill Lynch said GMG's parent Sinochem, being China's largest rubber trader, will give GMG direct access to the China market, which consumes a third of the world's rubber production.
The FTSE CNBC Asia 100 index traded mostly flat.
Indian markets were closed for the annual Republic Day holiday, while Australian markets were shut for Australia Day.