In a closely-watched press conference in Beijing, the Chinese central bank said the country's strong economic environment, sustained trade surplus, sound fiscal position and deep foreign exchange reserves remain "strong support" for the exchange rate, while adding that it will monitor "abnormal" cross border flows.
Prior to that, the PBOC set the midpoint rate for the at 6.4010 per dollar, weaker than the previous day's close of 6.3870, sending the currency down 0.4 percent to 6.4067.
Overnight, major U.S. indices finished little changed, following a rebound in afternoon trading led by rising energy shares. The S&P 500 and Nasdaq Composite ticked up 0.1 and 0.15 percent, respectively, while the blue-chip ended unchanged from the previous day's close.
Mainland markets up
China's Shanghai Composite index reversed early losses to lurch higher by more than 1 percent in late-afternoon trading. The Shanghai bourse eventually closed up 1.8 percent after choppy trade saw the index swinging between 1 percent on either side of the flatline.
Mirroring the moves in the benchmark index, the blue chip CSI300 index and Shenzhen Composite ended up 1.5 and 2.2 percent, respectively.
After coming under intense selling pressure in the past two trading sessions, Chinese carriers enjoyed a reprieve on Thursday, with China Eastern Airlines and Air China gaining 4.1 and 2.8 percent, respectively. Worries that a weaker currency could increase borrowing costs and fuel bills of Chinese carriers have weighed on airline shares for the past two trading sessions.
Analysts attributed the earlier declines to "confusion" in the mainland equity markets. "We had confusion in the markets last month due to self-inflicted wounds with regards to curbs on margin trading. It's confusion again today... as the [PBOC's comments] adds to further uncertainty and questions about the opacity in decision making," Stephen Davies, CEO at Javelin Wealth Management, told CNBC.
Shares of the world's top PC maker skidded nearly 9 percent after quarterly revenue missed market expectations and as the firm announced plans to lay off 3,200 people in non-manufacturing positions, a move that would save $650 million in the second half of 2015.
Gaming firm NagaCorp dropped 2.2 percent, after rising earlier on the back of a 42 percent surge in gross gaming revenue and a 50 percent jump in interim net profit. SJM Holdings slumped 6.2 percent after its net profit halved on the back of slowing growth in Macau.
Hong Kong Exchanges and Clearing shed 0.6 percent, as worries about China eclipsed a record quarterly earnings report.
ASX adds 0.1%
Australia's S&P ASX 200 index pulled back to the flatline as banking and resources heavyweights trimmed gains. The Australian dollar fell as low as $0.7336 against the U.S. dollar before recovering to $0.7385.
Santos and Woodside Petroleum advanced nearly 2 percent each, after oil prices stabilized in Asian trade. Evolution Mining and Newcrest Mining rallied 4.4 and 3 percent, respectively, as spot gold touched a three-week high. Market bellwether BHP Billiton closed up 1.2 percent.
Meanwhile, investors were also fixated on a slew of corporate earnings. Telecoms giant Telstra plunged 2.2 percent after announcing a 1 percent slide in full-year net profit before the market open, as well as forecasting modest earnings growth in the current year.
The country's biggest gaming company Crown Resorts tumbled 3.2 percent after reporting a 41.3 percent fall in full-year net profit. News that billionaire James Packer has stepped down as chairman of the company and will be taking on a new executive director role may also have swayed sentiment.
Nikkei rises 1%
Japan's benchmark index fell into negative territory after the yuan fixing, but quickly hurled itself back above the flatline on the back of expectations that the yuan's depreciation could prompt further easing in Japan.
"Koichi Hamada, advisor to Prime Minister [Shinzo] Abe, has come out today and said that Japan can offset the [yuan] devaluation by further monetary easing. The [Bank of Japan] minutes out yesterday showed there were significant concerns by the central bank's board members about hitting the 2 percent inflation target by September 2016," IG's market analyst Angus Nicholson wrote in a note. "With deflationary pressures from the yuan's devaluation, there is going to be a high likelihood of further BOJ easing to stop an increase in the yen, possibly as soon as October."
A 2.8 percent surge in index heavyweight Fast Retailing also supported the bourse's rebound, alongside Trend Micro's 5.2 percent rise. Meanwhile, stocks with significant exposure to China such as construction equipment makers Komatsu and Hitachi Construction Machinery elevated 1 percent each.
On the domestic data front, core machinery orders fell 7.9 percent in June, posting its first decline in four months, according to data from the Cabinet Office early Thursday. On a year-on-year basis, the nation's leading indicator of capital spending rose 16.6 percent, below May's gain of 19.3 percent.
Kospi gains 0.4%
South Korea's Kospi index recouped earlier declines to end higher, breaking a five-day losing streak.
China-exposed plays in the retail and consumer discretionary sectors were among the biggest gainers. Retailers such as Shinsegae and Lotte Shopping rallied 5.9 and 4.6 percent, respectively, while Hotel Shilla ended up 5.9 percent likely on the back of bargain hunting and short-covering. Cosmetics makers AmorePacific and LG Household & Healthcare added 0.5 and 2.6 percent, respectively.
Meanwhile, the Bank of Korea (BOK) kept interest rates on hold at 1.5 percent, in line with expectations. The strengthened modestly against the greenback following the policy decision and last traded at 1,171 versus the dollar, compared with 1,175 prior to the data release.
"Going forward, we believe that the BOK's policy focus has shifted to safeguarding financial stability given the highly volatile global markets," ANZ analysts wrote in a research note. "While the macroeconomic condition does point to a gradual improvement, an easing bias will be maintained as the BOK continues to see high uncertainties surrounding the growth path."
Southeast Asia up
Malaysia's benchmark FTSE Bursa Malaysia KLCI index was on course for a rebound, likely helped by data that showed the Southeast Asian economy expanded 4.9 percent in the second quarter, beating Reuters' expectations of 4.5 percent. The figure, however, is below the 5.6 percent in the first three months of 2015.