Japan's Nikkei index closed lower on Thursday, as investors became frustrated after statements by Federal Reserve Chairman Jerome Powell that dashed hopes of cutting interest rates in March.
The Nikkei index fell 0.76 percent to 36,011.46 points, after falling below the key level of 36,000 points earlier in the session.
The broader Topix index fell 0.67 percent to 2,534.04 points.
Powell spoke of good news about the battle against inflation at the end of the central bank's meeting on Wednesday, but said that interest rate cuts would not be appropriate until there was greater confidence that inflation was moving towards the central bank's 2 percent target.
It's difficult to escape seeing the Federal Reserve as the main driver of price movement today, said Kyle Rodda, chief financial markets analyst at Capital.com.
The sub-index for automakers on the Topix index fell 1.41 percent. Toyota Motor and Honda Motor shares fell 1.83 percent and 1.85 percent, respectively.
Among the 225 companies listed in the Nikkei index, the shares of only 51 companies rose, while the shares of 170 companies fell.
TDK Corp. shares rose 5.48 percent, and Nomura Holdings, the largest brokerage and investment banking company in Japan, rose 5.15 percent.
Nomura Holdings shares briefly touched their highest levels since 2015, after announcing on Wednesday that the company would buy back up to four percent of its shares after reporting record net revenues from its investment banking division.
Ozora Bank shares fell 21.49 percent, followed by Sumitomo Pharma shares, with a loss of 18.43 percent.
