Over in Seoul, the Kospi declined 1.19 percent to end at 2,314.24 as technology stocks struggled. Samsung Electronics and SK Hynix were down 2.4 percent and 2 percent, respectively, despite the former settling a dispute with Apple over patents.

In Tokyo, the was little changed, finishing the day lower by 0.01 percent, or 1.38 points, at 22,270.39 and off its lows of the day. Mining stocks and semiconductor plays rose. Airline names, however, continued their descent, with the Topix air transport subindex down 1.64 percent, while automakers proved to be a bright spot, with Toyota up 1.09 percent.

Asian stocks closed lower on Thursday, with China markets falling back into negative territory as investors digested developments related to the U.S. stance on foreign investment amid lingering trade concerns.

China markets turned lower in the afternoon after earlier getting some reprieve from recent losses. On the mainland, the fell 0.97 percent to 2,785.98, notching its fourth-straight session of declines, and the Shenzhen composite tumbled 1.19 percent to close at 1,556.82.

Hong Kong's , however, was up 0.42 percent by 3:49 p.m. HK/SIN as energy shares and the information technology sector gained, while declines in real estate stocks capped gains. Developers like Country Garden and Evergrande were down 3.3 percent and 4.45 percent, respectively, before the market close.

Down Under, the S&P/ASX 200 reversed course, advancing 0.31 percent to close at 6,215.40, with gains in the heavily weighted financials sector buoying the broader index. The energy subindex also contributed to gains, rising 1.83 percent and extending gains made in the last session on the back of the recent climb in oil prices.

MSCI's index of shares in Asia Pacific excluding Japan declined 0.71 percent in Asia afternoon trade. Markets in Vietnam were closed on Thursday.

Trade jitters have weighed on investor sentiment in recent weeks, with markets in China, in particular, taking a beating amid worries over the potential economic impact of the Trump administration's trade policies. The Shanghai composite is in bear market territory, referring to a decline of at least 20 percent from a 52-week high, since Tuesday.

For the month, both the benchmark Shanghai composite and the CSI 300 have declined more than 9 percent. The Shenzhen composite has fallen almost 12 percent in June.

The broader move lower in Asian markets on Thursday came after the U.S. government said it intends to use the Committee on Foreign Investment in the United States (CFIUS) review process to address concerns over foreign acquisitions of U.S. technologies.

The development is seen as softer than plans floated earlier that would have targeted China more specifically.

Still, U.S. Treasury Secretary Steven Mnuchin told CNBC on Wednesday that the U.S. will be able to block joint ventures if technology transfer is involved. Meanwhile, White House economic advisor Larry Kudlow said the Trump administration's stance on China should not be regarded as a softened one.

"I think markets and investors are still a little bit cautious, and that kind of wait and see, holding pattern [persists] here. So maybe we are approaching close to the bottom here, but obviously we can't rule out that the markets can still continue to go further down," Tuan Huynh, Asia Pacific CIO at Deutsche Bank Wealth Management, told CNBC's "Squawk Box."

He added that most negative news should have been priced in by markets by now.

U.S. markets had closed lower on Wednesday, with drops in the financials and technology sectors dragging major indexes there lower. The 30-stock Dow Jones Industrial Average declined 0.58 percent, or 165.52 points, to close at 24,117.59.

Earlier, the Dow had risen almost 286 points after U.S. plans to target foreign investment turned out , although markets lost steam throughout the session.

On the energy front, oil prices pared some gains after advancing on Wednesday. U.S. crude futures slipped 0.32 percent to trade at $72.53 per barrel after settling more than 3 percent higher in the last session. Brent crude futures were a touch softer at $77.55.

The surge in prices overnight came amid concerns over supply: U.S. crude stockpiles dropped by almost 10 million barrels last week, which was a larger-than-expected fall, while supply disruptions in Canada and Libya remained in focus.

In currencies, the dollar index, which tracks the greenback against a basket of currencies, extended gains to trade at 95.515. Against the yen, the greenback firmed to 110.40 by 3:23 p.m. HK/SIN.

Of note, the Indian rupee touched a record low during the session. The currency last traded at 68.9350 to the dollar after earlier topping the 69 level for the first time.

Meanwhile, continued declines in the yuan against the dollar saw investors turn bearish against the Chinese currency for the first time in more than one year, according to a Reuters poll. The spot yuan was last trading at 6.6199 to the dollar after opening for trade at 6.6177.

On the economic front, Indonesia's central bank begins a two-day meeting on Thursday and is expected to announce its interest rate decision on Friday.

In individual movers, shares of Korean Air Lines sank 3.57 percent as company chairman, Cho Yang-ho, was questioned over alleged tax evasion in Seoul on Thursday.