Asian stock markets closed higher on Thursday on hopes of a steady economic revival in China although gains were marginal compared to the previous session's strong gains as investors took some money off the table and braced for more U.S. budget battles.
Data from China showing the services sectors expanded in December continued to underpin expectations of an economic recovery that has helped spur a strong rally in Chinese shares over the past month.
Financial markets in Japan and China remain closed on Thursday for the New Year holiday. They re-open on Friday.
The FTSE CNBC Asia 100 was flat, inching up 0.06 percent.
Australian shares rose 0.7 percent to a fresh 19-month high as investors snapped up exporters such as miners on encouraging signs from the world's top two economies.
The benchmark S&P/ASX 200 index rose 35 points to 4,740.7, according to the latest data, its highest since May 19 2011. It gained 1.2 percent on Wednesday, the biggest one-day percentage rise in five months.
Miners gained, with iron ore producer Fortescue Metals rising 2.4 percent, its best close in six months. BHP Billiton added 0.8 percent, while Rio Tinto notched up another 2.4 percent.
New Zealand's benchmark NZX 50 index rose 0.4 percent to 4,082.4 as trade resumed after holidays.
South Korean shares retreated from opening highs, as automakers slumped on concerns that the firming local currency will sap their profits.
The Korea Composite Stock Price Index (KOSPI) closed down 0.6 percent at 2,019.41 points, trimming Wednesday's gains, but still at 9-month highs.
Hyundai Motor fell 4.6 percent on fears that the firming Korean won would hurt price competitiveness and profits.
Hong Kong shares crept to another 19-month high, with last year's growth-sensitive laggards leading gains on Thursday as further positive China data affirmed the recovery trend in the world's second-largest economy.
The Hang Seng Index closed up 0.4 percent at 23,398.6, its highest close since June 1, 2011. The China Enterprise Index of the top Chinese listings ended up 0.8 percent.
Chinese property stocks were stronger after Shimao Properties reported a 50 percent jump in contracted sales in 2012 from the previous year. Chinese property developers were also bolstered by solid demand for Country Garden's tapping of the credit market. Shimao jumped 9.6 percent and Country Garden rose 6.3 percent.
China coal miners tracked an Asia-wide rally following more positive data from China economy as investors chased laggards from last year. China Coal Energy rose 1.5 percent, while Yanzhou Coal gained 2.5 percent.
China power producers were among the bigger percentage losers. Huaneng Power lost 2.6 percent from Wednesday's 5-year closing high, while China Resources Power slid 3.3 percent from its highest since June 2008.
Over in Southeast Asia, Singapore's Straits Times Index closed up 0.7 percent while Malaysia's KLCI Index ended 1.1 percent higher.
In India, both the BSE Index and the 50-share NSE Index finished 0.2 percent higher.
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