Japan's Nikkei 225 Average managed to pare back the morning's sharp losses to close 0.8 percent lower, as weaker-than-expected industrial production figures plus the strong yen sank exporters. Market players said shares didn't fall as much as might be expected from the line-up of negative factors, with investors seeming to pin their hopes on another rate cut from the Fed.
South Korea's KOSPI closed 0.9 percent higher, as Korea Zinc, the world's biggest refiner of zinc, jumped 2.25 percent after London zinc futures soared 6 percent on Wednesday, as dollar weakness boosted metal prices across the board.
Australian shares extended early losses to close more than 2 percent lower as selling in banking stocks intensified after strong domestic investment data raised the prospects of an interest rate hike next week. Weaker-than-expected earnings at Suncorp-Metway, a general insurer and bank, also weighed down on the banking sector.
Shares of Australia's Centro Properties Group were higher on a Wall Street Journal report that at least four companies, including U.S. private equity firm Blackstone Group and a unit of General Electric (the parent company of CNBC) are considering making bids for the company.
Hong Kong's Hang Seng Index swung back into the black after a negative start, ending up by 0.4 percent. Aluminum Corp of China (Chalco), the country's top alumina producer, rose amid strained supplies. Industry officials said China's recent snowstorms and power outages may reduce primary aluminum output. Sinopec also gained 3.3 percent on talk that Asia's top refiner may receive substantial government subsidies as oil prices set records.
Singapore's Straits Times Index was down 0.7 percent, but Chinese stocks dropped, hit by profit-taking in Ping An Insurance, which had rallied this week on expectations it would revise or delay its multi-billion dollar fund-raising plan. Volumes were low, as many investors remained cautious, making a sharp rebound unlikely for now.
China's Shanghai Composite was lower by 0.8 percent at the close. It opened higher and briefly rebounded into positive territory during the afternoon, but spent most of the day lower.
Wilmar International, the world's biggest listed palm oil trader, posted a five-fold jump in fourth-quarter net profit as palm oil soared to record highs. But shares fell as much as 6 percent as traders cashed in on a strong rally this month, according to Reuters.
China's Shanghai Pudong Development Bank rebounded after the Chinese lender announced a plan to raise 25 billion yuan ($3.5 billion) by selling new shares, much less than it previously indicated.