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China at 4-Month Low on CPI Data; Japan Rallies

Asian shares ended mixed on Friday as a pick-up in Chinese inflation prompted profit taking, with mainland shares slumping 1.8 percent. But Japan's Nikkei managed to defy broader regional weakness as the yen logged fresh losses.

Chinese inflation rose 2.5 percent in December, overshooting expectations and dampening the chance for further policy easing as the world's second-largest economy recovers.

Symbol
Name
Price
 
Change
%Change
NIKKEI
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HSI
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ASX 200
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SHANGHAI
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KOSPI
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CNBC 100
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The FTSE CNBC Asia 100 index crept down 0.01 percent.

Japan's Nikkei hit a 23-month high, with exporters up on a weaker yen after Prime Minister Shinzo Abe reportedly said the central bank should consider pursuing maximum employment, while Fast Retailing jumped after strong quarterly results.

The benchmark index ended 1.4 percent higher at 10,801.5 points, while the broader Topix index gained 1.1 percent to 898.6.

Sharp surged 12.6 percent after the Asahi newspaper said Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ are considering providing additional loans to the struggling TV maker.

Exporters led the gains, with Nissan Motor rising 2.2 percent, Komatsu advancing 1.6 percent, and Nikon adding 3.3 percent.

Fast Retailing rallied 4.1 percent after the operator of the Uniqlo clothing chain generated a net profit of $437 million for the September-November quarter, a 24 percent gain from a year-earlier.

Japan's cabinet approved an economic stimulus package in the biggest spending boost since the financial crisis as Prime Minister Shinzo Abe pursues an ambitious agenda to spur growth and end nagging deflation.

China shares posted their worst daily loss in nearly four months, snapping a five-week winning streak after higher-than-expected December inflation crimped expectations for further monetary easing.

The CSI300 of the top Shanghai and Shenzhen A-shares closed down 1.9 percent on the day, while the Shanghai Composite Index shed 1.8 percent on Friday and 1.5 percent this week.

Hong Kong shares reversed gains after higher-than-expected China inflation triggered profit taking in recent outperformers, snapping a two-week winning streak in the process.

The Hang Seng Index closed down 0.4 percent on the day and 0.3 percent on the week at 23,264.1 Points. The China Enterprises Index of the top Chinese listings in Hong Kong shed 0.7 percent on Friday and 0.8 percent this week.

China's annual consumer inflation rate accelerated to a seven-month high of 2.5 percent in December on rising food prices, narrowing the scope for further policy easing by the central bank to boost the economy.

(Read More: Time for China to Remove the Stimulus Punch Bowl?)

Inflation data accelerated losses in the Chinese property and brokerage sectors, outperformers in 2012 that have also started 2013 relatively strongly.

Other growth-sensitive counters that were buoyed by China's superlative export data on Thursday were also among the bigger percentage losers on Friday.

Citic Securities declined 2.1 percent after the official Shanghai Securities News reported that China's securities regulator has reprimanded China's largest listed brokerage for failing to disclose a decline in profitablity in Soochow Securities before its A-share initial public offering.

South Korean shares ended down as a stronger won threatened to sap earnings of exporters, especially automakers.

The Korea Composite Stock Price Index finished down 0.5 percent at 1,996.6 points, marking a weekly loss of 0.7 percent.

Tech heavyweight Samsung Electronics closed up 0.2 percent after crisscrossing back and forth out of negative territory.

Auto shares lost ground on concerns that Japanese competitors will benefit from both a weakening yen and a strengthening won. Hyundai Motor dropped 1.7 percent while sibling Kia Motors fell 2.2 percent.

Australian shares slipped 0.3 percent with miners losing ground as a cyclone affected their operations, overshadowing gains in other sectors.

The S&P/ASX 200 index closed 12.3 points lower to 4,710.6.

BHP Billiton lost 2 percent after suspending offshore oilfields and rival iron ore miner Rio Tinto dropped 1.9 percent after shutting down key iron ore export terminals as a cyclone intensified off Australia's northwest coast.

Banks were mostly higher, with National Bank of Australia leading gains, up 0.5 percent. The Commonwealth Bank of Australia bucked the trend, slipping 0.4 percent.

New Zealand's benchmark NZX 50 index rose 0.3 percent to 4,131.8, a fresh five-year closing high.

Over in Southeast Asia, Singapore's Straits Times Index closed down 0.3 percent and Malaysia's KLCI Composite Index ended 0.1 percent lower.

India's BSE Index and the 50-share NSE Index ended 0.4 percent lower despite Infosys shares surging by 16.8 percent, potentially posting its biggest daily percentage gain, after reporting a stronger-than-expected October-December profit and raising its annual revenue forecast.