Asian markets were mixed and government bond yields fell Thursday morning, following the Federal Reserve's first interest-rate hike in three years.

On Wednesday, the U.S. central bank unanimously raised the benchmark federal-funds rate by a quarter percentage point to a range between 3.75% and 4%. The move marked a sharp policy reversal, beginning to unwind rate cuts made last year while implicitly undercutting the White House's assertions that inflation is not a concern.

Fed Chair Kevin Warsh struck a decidedly hawkish tone, saying that "inflation is too high and has been for too long."

There are no immediate signs of U.S. inflation easing, particularly amid the ongoing stalemate in the Middle East, said Tai Hui, APAC chief market strategist at J.P. Morgan Asset Management. "This means the Fed may need to continue to tighten in order to achieve its target. It may wait until December given the October FOMC meeting is only a few days ahead of the mid-term elections," he added.

In regional equity trading, Japan's Nikkei Stock Average was last up 0.1%, Taiwan's Taiex gained 1.1% and South Korea's Kospi edged 0.1% higher. However, the Shanghai Composite index was down 0.3% and Hong Kong's Hang Seng Index was 1.0% lower.

Asian government bond yields were lower, tracking declines in U.S. Treasury yields alongside a stronger dollar.

Japan's 10-year sovereign debt was down half a basis point at 2.990%, Australia's 10-year government bonds dropped 4.4 basis points to 5.310% and New Zealand's 10-year sovereign securities edged down 0.2 basis point to 5.014%. Bond yields move inversely to prices.

Meanwhile, oil prices declined as concerns over Middle East supplies eased, despite the protracted conflict showing no immediate resolution.

The softer prices likely reflect optimism about taming the impact of the deep disruption to Middle East crude-oil exports, said XS.com's Samer Hasn in a note, citing reports of Saudi Arabia shifting crude loading away from the out-of-service Yanbu port.

Front-month West Texas Intermediate crude oil futures were down 0.5% at $101.96 a barrel, while Brent was 0.4% lower at $105.39 a barrel, according to ICE data.