Asian equities rose on Thursday after the Greek parliament voted in favor of a new bailout plan, but Chinese market volatility remained a worry.
Lawmakers in Athens passed strict austerity measures needed to secure a debt deal from its creditors early Thursday morning local time, two hours after the official deadline. However, politicians from within Prime Minister Alexis Tsipras' ruling Syrzia party opposed the conditions outlined in Monday's deal, which include tax increases and spending cuts, sparking concerns of internal political strife. The vote comes ahead of Monday's payment to the European Central Bank (ECB).
Attention now falls on the ECB's rates decision later on Thursday, with President Mario Draghi likely to face questions on a decision on Emergency Liquidity Assistance (ELA) for Greece. The ELA is a program of emergency loans for Greek lenders to keep them solvent and now that the Greek parliament has approved the necessary reforms, the central bank is widely expected to increase funding.
In the U.S., Federal Reserve Chair Janet Yellen kicked off her two-day testimony before Congress on Wednesday, saying that a decision to hike interest rates would not mean the economy was in trouble. She reiterated last Friday's statement that the central bank is on pace to raise rates this year if the economy evolves as expected.
Shanghai 0.5% higher
China's benchmark Shanghai Composite tanked as much as 2 percent before erasing losses in late-morning trade. The index closed down 3 percent on Wednesday despite strong second quarter gross domestic product data after snapping a three-day rally on Tuesday.
Read MoreChina GDP: Believe it or not?
Banks weighed on the index, with Bank of China and Bank of Communications falling 2 percent each. Meanwhile, Hundson Technologies slumped 10 percent after halting new account openings as regulators launch an investigation into its margin financing activities.
Elsewhere, the Shenzhen Composite jumped 1 percent after an early loss of more than 3 percent while the CSI 3000—a benchmark tracking blue-chip stocks listed in Shanghai and Shenzhen—ended 0.8 percent higher following a 2 percent loss earlier. The mood remains tense on news that key future contracts, especially the CSI 3000, are priced at a discount to current market levels, indicating that investors will need to continue selling or face losses, Reuters reported.
Hong Kong stocks were flat after losing nearly 1 percent in early trade, weighed down by sharp losses amid gaming stocks; Galaxy Entertainment led losses by more than 2 percent.
Nikkei rises 0.7%
Japan's benchmark Nikkei index climbed for a fourth day, ending at a new three-week high, as investors cheered a weaker currency. The yen weakened to a new three-week low of 123.97 per dollar overnight and hovered near that level in the Asian session.
Defense-related stocks were in focus after lawmakers approved a new security bill that could allow Japanese troops to fight abroad for the first time since World War II. Kawasaki Heavy Industries added 1 percent while Fuji Heavy ended 0.7 percent higher.
Toshiba lost 1.5 percent on reports that the consumer electronics firm is facing $3 billion in charges related to an ongoing accounting probe, a day after CEO Hisao Tanaka and several key board members announced their resignation.
ASX up 0.6%
Australian shares hit a new three-week peak, higher for a third session, as resource companies released a slew of quarterly production reports.
Mining heavyweight Rio Tinto rose 0.3 percent after announcing a 9 percent annual rise in second quarter iron ore production.
Kospi gains 0.7%
South Korea's benchmark Kospi index rose to a new two-week high as the fell to a new two-year low against the greenback.
Samsung C&T and Cheil Industries gained 3 and 5 percent, respectively, ahead of Friday's shareholders vote on a controversial planned merger between the two Samsung units. KTB Asset Management announced on Thursday that it is collectively voting its Samsung C&T shares in favor of Cheil's takeover offer.
Steelmaker Posco tumbled 2.6 percent after reporting a 18.2 percent annual slump in second quarter operating profit.
Elsewhere in Asia
Singapore's Straits Times Index posted modest gains while the Singapore dollar touched a three-month low against the greenback following weak June trade data. Exports came in at a better-than-expected 4.7 percent on year, but fell 2.4 percent on month.