- Asian stocks finished mixed, with Hong Kong leading losses before the market close.
- Trade talks between officials from the U.S. and China were in focus as some investors worried about trade tensions.
- Investors also digested the Federal Reserve's views on inflation in its statement.
- The dollar was softer against a basket of currencies.
Asian shares closed mixed on Thursday as U.S.-China trade talks kicked off and investors digested an acknowledgment by the Federal Reserve that inflation had moved nearer its target.
South Korea's Kospi index came under pressure, with the benchmark declining 0.73 percent to close at 2,487.25. Banks and manufacturing names were mostly lower, while technology stocks eked out some gains.
Down Under, the S&P/ASX 200 climbed 0.8 percent to 6,098.30 amid broad-based gains, with gold producers and the materials sector among the best performers.
Greater China markets turned in a mixed performance, with Hong Kong's falling 1.44 percent by 3:07 p.m. HK/SIN and leading losses in the region. The financials and technology sectors were down 1.29 percent and 1.59 percent, respectively, amid broad-based negativity before the market close.
The decline was likely due to concerns over a trade war, said Kenny Wen, a strategist at Everbright Sun Hung Kai, citing a Reuters report in which a Chinese government official said China had a "much greater ability to endure" the effects of a trade war than the U.S.
Despite worries over trade issues, mainland markets finished the day with gains. The reversed early losses to close higher by 0.65 percent at 3,101.13 and the Shenzhen composite advanced 1.01 percent to 1,792.89.
MSCI's broad index of shares in Asia Pacific excluding Japan traded lower by 0.6 percent in afternoon trade.
Markets in Japan were closed on Thursday.
Trade was in focus as a U.S. delegation begins negotiations with their Chinese counterparts on Thursday and Friday in Beijing. Treasury Secretary Steve Mnuchin, Commerce Secretary Wilbur Ross and Trade Representative Robert Lighthizer are among the U.S. officials participating in the meeting.
"[T]he mood music coming out isn't great ... as they continue to stress that they will return early if they do not think there is much promise of progress," Robert Carnell, Asia Pacific head of research at ING, said in a note.
"This could be a market mover in either direction. But more likely down," he added.
In its post-meeting statement, the central bank's Federal Open Market Committee said "overall inflation and inflation for items other than food and energy have moved close to 2 percent." That was an upgrade from its March meeting, when the committee noted that the indicators had "continued to run below 2 percent."
Investors had been awaiting the Fed's statement for clues on its outlook on inflation and the economy.
"The FOMC statement reinforced market expectation for another 25 basis points rate rise in its June meeting," Tai Hui, chief market strategist at J.P. Morgan Asset Management, said in a note.
The mixed performance in Asia came after U.S. stocks finished the day in negative territory despite strong earnings releases stateside.
National Australia Bank announced earlier that its first-half cash profit declined 16 percent. Reuters said the fall came as the bank recorded costs associated with restructuring. Shares closed lower by 0.64 percent.
Of note, Chinese smartphone maker Xiaomi on Thursday filed an initial public offering application in Hong Kong. In the filing, the company reported revenue rose 68 percent to 114.6 billion yuan ($18 billion) in 2017 and a net loss of 43.9 billion yuan ($6.9 billion) for the period.
In currencies, the dollar index, which tracks the U.S. currency against six major peers, traded at 92.478 at 2:56 p.m. HK/SIN, below the 92.8 handle touched on Wednesday and under a four-month high hit in the last session. The dollar index initially dipped in reaction to the Fed's statement in the last session, but later pared some of those losses.
Against the yen, the dollar softened to trade at 109.65.
Oil prices were steady on Thursday following a larger-than-expected increase in U.S. crude inventories: U.S. crude futures were higher by 0.04 percent at $67.96 per barrel and Brent crude futures for July delivery were flat at $73.36.
— CNBC's Jeff Cox and Yen Nee Lee contributed to this report.