The possibility of the Fed introducing an interest rate hike in the next month or two still hovers over Asian markets.

Although Chinese stocks came rolling back on Thursday after its two-day holiday, Japanese markets pulled back on bad economic data and most Asian markets fell.

MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.3 percent, changing course from a possible 6-day winning streak after reaching a 1-1/2 month high this week. It seemed that investors were eager to give in to their risk appetite after the federal reserve decision not to implement an interest rate hike.

According to some analysts, stocks in Hong Kong are still far too expensive.”

The main focus for investors is China. Chinese stock markets which have fluctuated wildly over the last few months surged with the Shanghai Composite Index climbing 3.8 percent heading for the steepest advance in three weeks. More than 900 stocks climbed, with technology and health-care companies leading gains. Trading volumes were about 14 percent below the 30-day average for this time of day. Hong Kong's Hang Seng China Enterprises Index dropped 1.2 percent by noon, after gaining 11 percent.

According to some analysts, stocks in Hong Kong are still far too expensive but concerns about China's economy seem to be receding and there are hopes for more stimulus measures to emerge that would solidify the country's continued growth.

On Wall Street, biotech companies as well as energy and healthcare stocks helped to raise the S&P 500 to a 3-week high.

Japan's Topix index retreated 0.4 percent while the S&P/ASX 200 Index Sydney added 0.6 percent as mining and energy stocks extended gains. New Zealand's S&P/NZX 50 Index fell 0.4 percent in Wellington. The Kospi index in Seoul slipped 0.2 percent.

Rate Hike Still Possible

Although many market participants have shifted their expectations of a Fed hike out to March 2016, many Fed officials themselves continue to signal the likelihood of a rate hike before the end of the year.