Most Asian markets closed up on Thursday, following a mostly higher finish on Wall Street overnight amid an oil price surge.
"The global equity market has become a hostage of oil movement. The correlation is immensely in tandem," Naeem Aslam, an analyst at AVA Trade, said in a note Thursday. "The strong rally over in the U.S. has also helped Asian markets to secure some gains."
Australia's ASX 200 gained 103.64 points, or 2.13 percent, to 4,980.40, with the energy sector retracing losses from Wednesday's session to tack on 6.21 percent, while the material sector was up 6.23 percent on the back of higher commodity prices.
In South Korea, the Kospi gained 25.59 points, or 1.35 percent, to 1,916.26, while in Hong Kong, the index gained 1.43 percent.
Chinese markets gained ground, with the closing up 42.54 points, or 1.55 percent, at 2,781.79 while the smaller Shenzhen composite gained 33.86 points, or 1.95 percent, to 1,771.06.
Bucking the positive trend, the extended recent losses to close 146.26 points, or 0.85 percent, lower at 17,044.99.
Chris Weston, chief market strategist at spreadbetter IG, said in a morning note that the Nikkei's sell-off can likely be explained by the strength of the Japanese yen as a result of a fall in the dollar.
The dollar slipped 1.65 percent overnight against a basket of currencies as weak U.S. economic data suggested a March interest rate hike from the data-dependent Federal Reserve was unlikely. The ISM non-manufacturing index's January reading came in at 53.5, below the expected 55.1 and the lowest reading since December 2013.
Weston said, though, that dollar had been "taken to the cleaners" even before the release of U.S. data.
"The selling in the USD has been ferocious. It's been one way and whether it was driven by oil selling, liquidity, a full re-pricing of U.S. rate hikes, or some more mysterious theme, the USD selling has resonated in markets," he said.
Some analysts think the fall in the dollar might have some staying power.
HSBC Private Bank's head of investment strategy in Asia, Banjamin Pedley told CNBC's "Squawk Box" that the dollar's fall overnight is something that had been anticipated.
"It does seem as though that move last night is typically a meaningful move that I think signs off on the final page, if you will, for that dollar bull run that was in place for much of the past few years," said Pedley.
In Japan, shares of Sharp retraced early gains of as much as 24 percent to close up 16.79 percent after Japanese broadcaster NHK initially reported that the troubled electronics maker had accepted a takeover offer by Taiwan's Hon Hai Precision Industry, better known as Foxconn, and rejected a rescue plan by a Japanese state-backed fund after months of uncertainty over the company's fate. Foxconn offered to invest over 700 billion yen ($5.94 billion) in Sharp, according to NHK.
Later Reuters reported Sharp said no final decision has been made to be rescued by Foxconn, but that a source said Foxconn gained negotiating rights.
Toshiba shares rose 2.90 percent, retracing early losses of as much as 5.59 percent. The company said it is looking into whether to deepen its full-year loss forecast. The company is set to report its earnings later in the day. Japanese news media Kyodo News and the Nikkei reported that the company will deepen its net loss projection to over 600 billion yen ($5.1 billion), from the current forecast of 550 billion yen in losses, for the year ending March 31.
The dollar-yen pair traded at 117.90, down from levels over 120 earlier this week. Japanese export stocks were mixed with shares of Toyota down 2.14 percent, while Canon added 1.10 percent. A stronger yen is usually a negative for exporters as it trims their overseas revenue when converted back to local currency.
Fortescue shares closed up 11.73 percent as iron ore prices saw a rebound. Dalian iron ore futures for May delivery were up as much as 3.98 percent at 340 yuan ($52) a tonne, off the session high of 341 yuan. It was at its strongest level since October 20. The spot iron price was also up, with iron ore for immediate delivery to China's Tianjin port at $44, the highest since November 23.
Oil prices continued their upward trend from overnight during Asian hours with U.S. crude futures rising 0.65 percent to $32.49 a barrel, following an 8 percent increase during U.S. hours. Global benchmark Brent was up 0.46 percent at $35.20 a barrel after gaining 7.1 percent overnight.
Most energy plays saw rebounds, with shares of Santos up 13.36 percent, Oil Search up 7.14 percent, Hong Kong-listed CNOOC gaining 6.07 percent and Inpex, which is set to report earnings today, gaining 2.90 percent.
But oversupply remains and with no signs of imminent production cuts from OPEC, Weston said volatility in crude could easily see prices gaining or declining by 5-10 percent in the Asian session on Thursday.
Major indexes in the U.S. finished mixed, with the gaining 183.12 points, or 1.13 percent, to 16,336.6. The S&P 500 was up 9.5 points, or 0.5 percent, at 1,912.53, while the slipped 12.71 points, or 0.28 percent, to 4,504.24.
On the earnings front, major brands across the region are expected to release data, including Sharp, Tata Steel and Singapore Airlines.