Nikkei gains near 0.6 percent
The Japanese market finished higher, with the main Nikkei 225 index up 104 points, or 0.56 percent, at 18,873.
Shares of Sharp Corp. jumped 7.27 percent. According to local media reports last week, citing sources close to the matter, Taiwan's Hon Hai Precision Industry, one of the largest suppliers of electronics products, proposed buying the Japanese company for 300 billion yen.
Hon Hai shares closed down 0.74 percent.
Before trading started, Japan's Ministry of Economy, Trade, and Industry (METI) released the country's November industrial output data.
Japan's factory output for the previous month fell 1 percent on-month, lower than a market expectation of a 0.6 percent drop.
Manufacturers, however, remain optimistic over output. Those surveyed by METI said they expect output to rise 0.9 percent in December and 6 percent in January.
Japan's November retail sales fell 1 percent on-year, more than a forecast for a 0.6 percent decline, according to a Reuters poll.
Retail giant and index heavyweight Fast Retailing closed down 1.27 percent.
The yen traded near flat at 120.45 against the dollar.
Kospi in the red, loses over 1 percent
In Korea, the Kospi closed down 1.34 percent at 1,964 in the afternoon.
Shares of Samsung Group companies were mostly trading lower across the board, with Samsung C&T down 4.81 percent at market close.
Last week, reports said Samsung SDI, which primarily makes batteries, will sell 2.6 percent stake in Samsung C&T to comply with cross-shareholding regulations.
Shares of Samsung SDI ended down 3.06 percent.
Samsung Electronics shares finished 1.48 percent lower. Reuters, citing South Korea's Electronic Times, reported that the smartphone maker announced plans for an initial production of about 5 million units of its upcoming Galaxy S7 smartphones.
Meanwhile, shares of Samsung Engineering erased morning losses to close up 5.48 percent in the afternoon session. In a stock exchange filing, the company released details of its contract for an Ultra Low Sulfur Diesel (ULSD) project with Mexico's state-owned oil firm Petroleos Mexicanos (Pemex).
Elsewhere, shares of Daewoo Securities finished in the red, down 1.96 percent after reports that Mirae Asset Group, one of the country's leading asset managers, was selected as the preferred bidder to take over the company. Shares of Mirae were down 1.93 percent.