The Fed raised interest rates by another three-quarter of a percentage point and signaled further aggressive rate hikes for the remainder of the year.
Meanwhile, the Bank of Japan will wrap up its monetary policy meeting later in the day and then announce its decision on interest rates. The BoJ is expected to keep its benchmark lending rate unchanged at -0.1 percent.
The benchmark Nikkei 225 Index is down 291.47 points or 1.07 percent to 27,021.66, after hitting a low of 26,955.18 earlier. Japanese stocks closed sharply lower on Wednesday.
Market heavyweight SoftBank Group is losing almost 3 percent and Uniqlo operator Fast Retailing is down 1.5 percent. Among automakers, Honda is losing almost 1 percent, while Toyota is edging up 0.1 percent.
In the tech space, Screen Holdings is losing almost 2 percent, Tokyo Electron is down more than 1 percent and Advantest is declining almost 2 percent.
In the banking sector, Mitsubishi UFJ Financial is losing more than 1 percent, Mizuho Financial is down almost 1 percent and Sumitomo Mitsui Financial is edging down 0.1 percent.
Among the major exporters, Canon is losing almost 1 percent, Sony is declining almost 2 percent, Mitsubishi Electric is edging down 0.4 percent and Panasonic is down more than 1 percent.
Among the other major losers, Toho Zinc is losing more than 4 percent and Kawasaki Kisen Kaisha is down more than 3 percent, while Recruit Holdings, Alps Alpine and Mitsui O.S.K. Lines are declining almost 3 percent each.
Conversely, there are no major gainers.
In the currency market, the U.S. dollar is trading in the mid-144 yen-range on Thursday.
On Wall Street, stocks typically saw wild swings following the Federal Reserve's monetary policy announcements but saw particularly significant volatility on the heels of the central bank's latest decision on Wednesday.
The major averages swung back and forth across the unchanged line before finishing the day just off their lows of the session. The Dow slumped 522.45 points or 1.7 percent to 30,183.78, the Nasdaq plunged 204.86 points or 1.8 percent to 11,220.19 and the S&P 500 tumbled 66.00 points or 1.7 percent to 3,789.93.
Meanwhile, the major European markets moved to the upside on the day. While the French CAC 40 Index advanced by 0.9 percent, the German DAX Index climbed by 0.8 percent and the U.K.'s FTSE 100 Index rose by 0.6 percent.
Crude oil prices drifted lower Wednesday amid concerns about the outlook for energy demand after the Federal Reserve's announcement of a sharp hike in interest rates raised fears about a recession. West Texas Intermediate Crude oil futures for November ended lower by $1.00 or 1.2 percent at $82.94 a barrel.