Over in South Korea, the Kospi closed 0.31% higher to 2,131.29, while Australia's added 0.59% to finish its trading day Down Under at 6,687.40.

"Downside risks regarding overseas economies are big, so we must carefully watch how they affect Japan's corporate and household sentiment," the Japanese central banks said in a statement announcing the policy decision.

In Japan, the Nikkei 225 gained 0.6% to close at 21,462.86, with shares of index heavyweight Softbank Group soaring 2.59%, while the Topix advanced 0.3% to end its trading day at 1,559.90. The moves in Tokyo came as the Bank of Japan kept interest rates unchanged, emphasizing global risks were rising over issues such as the ongoing trade tensions .

Mainland Chinese shares surged on the day, with the Shanghai composite adding 2.38% to about 2,987.12 and the Shenzhen component 2.34% higher to 9,134.96, while the Shenzhen composite gained 1.954% to 1,556.60.

Stocks in Asia were higher on Thursday after the U.S. Federal Reserve left interest rates unchanged overnight but opened the door to rate cuts on the horizon.

Overnight on Wall Street, the Dow Jones Industrial Average added 38.46 points to close at 26,504, while the S&P 500 rose 0.3% to finish its trading day stateside at 2,926.46. The Nasdaq Composite advanced 0.4% to close at 7,987.32.

The moves came as the Fed left interest rates unchanged at its monetary policy meeting, in line with expectations. The U.S. central bank did, however, drop the word word "patient" from its statement and said it would "act as appropriate" to sustain the economy.

The Fed's rate projections showed that eight Fed members see a cut this year, which traders took as a further sign the central bank was close to cutting rates. Its median forecast, however, still reflected no cuts this year, but additional easing in 2020.

Fed Chair Jerome Powell also said that some Fed officials believed the case for easier monetary policy had strengthened.

Following the Fed's statement, the closely watched 10-year Treasury yield steadily slipped, and during Asian trading hours fell below 2% for the first time since November 2016. Gold prices also soared, with spot gold up more than 1.6% to around $1,382.01 per ounce.

Meanwhile, on the U.S.-China trade front, hopes in Beijing appear to have risen for a trade deal between the two economic powerhouses.

U.S. President Donald Trump and Chinese Xi Jinping are set to meet at the upcoming G-20 summit in Japan, which will happen next week. Trump said talks between the "respective teams" would begin prior to that.

"It is positive that they're talking again," Sian Fenner, lead Asia economist at Oxford Economics, told CNBC's "Street Signs" on Thursday. "What would we be hoping is that at least we will see an easing in tensions so we won't be seeing any further tariff hikes."

"Will an agreement be achieved at this meeting? Very unlikely, there's a lot of hurdles they still need to overcome," she said, adding that "concessions on both sides" are needed.

"Although the Fed partiality has shifted from a wait and see mode to an easing bias, the fact that trade uncertainty and its impact on global growth has been the main catalyst for its change in stance, means that a new round of Fed easing is largely contingent on the outcomes from (the) upcoming G20 meeting between President Trump and Xi," analysts at National Australia Bank wrote in a note.

"For now though, the change in the Fed's bias has encouraged the market to increase its expectations that a new round of easing is just around the corner," they wrote.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.819 after slipping from levels above 97.6 yesterday.

The traded at 107.69 against the dollar after touching levels around 108.6 in the previous session, while the changed hands at $0.6905 after seeing an earlier low of $0.6875.

From levels around 6.93 earlier in the week, the offshore Chinese yuan jumped to 6.8577 against the dollar after touching an earlier high of 6.8535. Its onshore counterpart last traded at 6.8531 against the greenback, from levels around 6.92 earlier in the week.

Oil prices jumped in the afternoon of Asian trading hours, with the international benchmark Brent crude futures contract up 2.57% to $63.41 per barrel, while U.S. crude futures gained 2.79% to around $55.26 per barrel.

Tensions in the Middle East continued to remain high following recent attacks on two tanker ships in the Gulf of Oman. A U.S. official told NBC News on Thursday that an Iranian missile had shot down one of the country's military drones.

— Reuters and CNBC's Fred Imbert contributed to this report.