Asian stocks rebounded on Monday after Dubai said it had received $10 billion from Abu Dhabi to repay debt, which pushed down the yen but boosted the euro and emerging Asian currencies as risk appetite improved.
The dollar shot up to 88.90 yen on the news, from around 88.50yen. The euro also jumped to 130.43 yen from around 129.40 yen.
Dubai said it had received $10 billion from Abu Dhabi to help it repay $4.1 billion in an Islamic bond maturing on Monday, easing fears of a potential debt default that had rattled global markets.
Japan's Nikkei 225 Average trimmed earlier losses and finished flat after Dubai said it had received $10 billion from fellow UAE member Abu Dhabi.
The Nikkei inched down 2.19 points to 10,105.68, after earlier easing to as low as 10,009.60 in moderate trade. The broader Topix fell 0.4 percent to 885.08.
Kajima Corp and other construction firms turned positive after the news. Construction firms had been under pressure earlier on media reports that the Dubai government and its affiliated firms owe non-financial Japanese companies, including construction firms, roughly $7.5 billion in credit that had not been collected as of Oct. 31.
Kajima rose 1.1 percent to 184 yen and Shimizu Corp advanced 2 percent to 314 yen.
Toyota Motor 's 1.1 percent loss, weighed on the index, which had rallied 2.5 percent on Friday.
Mitsubishi UFJ Financial Group slid 2.9 percent to 442 yen, falling for the fourth straight session, as investors sold the stock ahead of its expected $1 trillion yen share sale.
But Japan Airlines jumped 3.2 percent and All Nippon Airways rose 1.2 percent, on news the United States and Japan have reached a landmark aviation agreement. The deal will ease barriers to passenger and cargo services and open up the possibility for stronger alliances.
Japanese business morale edged up further from a record low hit earlier this year but remained negative for the sixth quarter in a row, the Bank of Japan's Tankan survey showed, as the economy slowly recovers from its worst recession in six decades.
Seoul shares reversed course to end 0.5 percent higher as Dubai's bailout by Abu Dhabi boosted sentiment towards construction issues like Samsung C&T, which rose 3.3 percent.
The Korea Composite Stock Price Index (KOSPI) ended up at 1,664.77 points.
Korea Power Engineering Company (KOPEC) jumped 44 percent on its first day of trading as investors bet on a bright future for South Korea's sole nuclear power plant designer. KOPEC shares traded at 31,050 won, compared to its initial public offering (IPO) price of 21,600 won, the bottom of the target range.
Shares in Hyundai Mipo Dockyard dipped 5.5 percent after the shipbuilder posted a series of regulatory filings regarding delays in ship deliveries late Friday.
Memory chip issues retreated following losses in the key U.S. semiconductor index. Hynix Semiconductor ended 0.96 percent down after slipping over 2 percent earlier and Samsung Electronics trimmed losses to close 0.76 percent lower.
Australian shares drifted 0.4 percent higher, as firmer resource and retail stocks offset some profit-taking in the financial sector.
The benchmark S&P/ASX indexclosed 18.8 points higher at 4,654.0, having lost 1.4 percent last week.
New Zealand's benchmark NZX 50 index fell 0.9 percent to 3,098.8.
Shares in AXA Asia Pacific ended the session 1.7 percent lower on profit taking after rising to a 19-month high of A$6.01 on news the company has received a higher takeover offer.
Shares in Woodside Petroleum were on trading halt after the company said it planned a A$2.5 billion capital raising to help fund further LNG development. Its largest shareholder, Shell will take up its full entitlement.
Karoon Gas rose 5.7 percent on renewed expectations that its Browse Basin joint venture with ConocoPhillips has struck gas at its Poseidon-2 appraisal well.
Qantas gained 3.5 percent, boosted by further signs of a recovery in international travel demand after the airline put through a range of fare increases on some of its long-haul international destinations.
China's Shanghai Composite Index climbed 1.7 percent, reversing early losses as heavily weighted oil refiners surged after news of a Dubai debt deal, offsetting worries about rising share supplies.
The benchmark index finished at 3,302.904 points, its highest close in one week after slipping during the morning session to a two-week intraday low. The index posted a 2.1 percent decline last week.
Sinopec jumped 8.39 percent to 13.70 yuan while PetroChina, the most heavily weighted stock in the index, climbed 1.72 percent to 5.32 yuan.
The official Shanghai Securities News cited Sinopec's board secretary Huang Wensheng as saying that Sinopec was unlikely to buy overseas oil and gas assets from its parent this year due to the complexity of the process.
Taiwan stocks advanced 0.3 percent to a nearly 17-month closing high, but Asustek led some technology shares lower after it announced a plan to reduce its holding in subsidiary Pegatron to reduce conflict of interest between the two firms.
The main TAIEX share index rose 24.06 points to 7,819.13, its highest close since June 25, 2008.
Shares of Asustek slumped 7 percent to their lowest intraday level in six weeks, as its plan to cut holdings in a unit raised concerns Asustek shareholders would be directly hit by the results of the subsidiary.
Hong Kong shares reversed earlier losses with the Dubai debt deal soothing investor worries about the economic outlook.
The benchmark Hang Seng Index gained 0.8 percent to 22,085.75 by the close after falling as much as 1.6 percent to 21,546.53. Gains banks and property issues supported the market.
Kenford Group, which makes and sells electrical haircare products, slumped 20 percent to HK$0.49 after it reported a drop in net profit for the six months ended September.
In Southeast Asia, Singapore's STI ended flat and Malaysia's KLCI edged up 0.4 percent to 1,265 points in a subdued session.
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