Asia stocks rise on strong US lead; Rakuten tumbles over 9%

Asian equity markets kicked off the week higher following a strong lead from Wall Street on Friday and as investors shrugged off weak economic data from Japan.

U.S. stocks ended the week with gains on Friday; the blue-chip Dow led gains to close 0.8 percent higher while the S&P 500 added 0.5 percent despite mixed data. Consumer sentiment was unchanged in early February, while January export prices rose by slightly more than expected.

U.S. financial markets will be shut on Monday for the 'President's Day' holiday.

(Read more: China PMI, Bank of Japan in spotlight this week)

Nikkei gains 0.5%

Japan's benchmark Nikkei rebounded after sliding to a one-and-a-half-week low earlier in the session following disappointing fourth-quarter growth domestic product data. The economy grew a quarterly 0.3 percent between October to December, below estimates for a 0.7 percent gain.

"With real exports seriously underperforming and the recent rise in the yen, a further monetary easing step could be in the offing earlier than expected, possibly in a surprise move at the upcoming meeting," said Uwe Parpart, chief strategist and head of research at Reorient.

(Read more: Japan's GDP miss– What went wrong?)

A stronger currency also weighed on sentiment as the yen rose to a more than one-week high against the greenback. Exporters fell with Panasonic down 0.8 percent and Taiyo Yuden 2.7 percent lower.

Online retailer Rakuten closed down 9.5 percent after reaching a deal to buy Viber for nearly $1 billion on Friday.

Shanghai 0.9% higher

China's benchmark Shanghai Composite index rose to its highest levels in two months on economic optimism ahead of Thursday's HSBC's flash purchasing managers' index (PMI) for February.

Aviation stocks were among the best performers on reports that the government could soon release a blueprint on low altitude airspace management. Avic Aircraft and Hafei Aviation Industries rose over 3 percent each.

Banks were mixed despite data showing that lending rose to a four-year high in January. Minsheng Bank fell 1.7 percent while Bank of China added 0.4 percent.

"On the heels of better than expected exports data and fairly well-contained inflation (despite Chinese New Year), this [lending data] brightens China's outlook, said Vishnu Varathan, senior economist at Mizuho Bank in a note.

(Read more: China's bank lending party keeps on rolling)

Sydney up 0.5%

Australia's benchmark S&P ASX 200 closed at a three-month high, extending gains from Friday, while the Australian dollar hit a fresh one-month high at $0.9070 as investors digested the latest first-half earnings reports.

Ansell lost 5 percent despite reporting a 15 percent profit rise, coal hauler Aurizon rallied 1.7 percent following an 18 percent rise in profits while UGL slumped over 12 percent on weak earnings guidance.

Banks were among the top gainers; Australia and New Zealand Banking rose 1 percent while National Australia Bank rallied 1.8 percent.

Kospi 0.3% higher

South Korean shares extended last week's gains to end at a near one-month high.

KB Financial rose over 5 percent despite being banned from issuing new credit cards or extending loans until May as a result of massive data theft.

Samsung Engineering increased over 2 percent after winning an order to build gas treatment facilities in Algeria.

India advances 0.5%

The benchmark Sensex index eked out modest gains after finance minister P Chidambaram announced that the 2013/14 current account deficit was expected around $45 billion while the fiscal deficit is seen around 4.6 percent of GDP.

— By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC