Markets in the Asia-Pacific mostly rose as expectations of cooled inflation in the U.S. lifted investor sentiment in the region.
In mainland China, the Shenzhen Component rose 1.58% to close at 11,785.77, leading gains in the wider region. The Shanghai Composite rose 1.01% to 3,227.59 as the nation saw home prices further drop in December. Hong Kong's Hang Seng index was flat after erasing earlier gains.
In Australia, the S&P/ASX 200 rose 0.82% to 7,388.2 while Japan's Nikkei 225 fell 1.14% to 25,822.32 and the Topix shed 0.88% to 1,886.31. South Korea's Kospi inched up 0.58% to 2,399.86 and the Kodaq gained 0.71% to 716.89.
Over the weekend, China reported a surge of nearly 60,000 Covid deaths since dropping restrictions last month. The announcement came after the World Health Organization criticized China, alleging it was underreporting deaths.
— CNBC's Tanaya Macheel, Samantha Subin contributed to this report
China's home prices drop further in December
China's home prices fell 1.5% in December nationwide on an annualized basis, Refinitiv calculations of data from the National Bureau of Statistics showed.
House prices fell 0.25% in December on a monthly basis, the same rate of decline seen in November. Existing home prices saw a drop of 0.48% compared with a year ago, slightly faster than November's 0.44% decline.
Separately, the People's Bank of China on Friday hinted at forthcoming changes to its "three red lines" for developers. Introduced in 2020, the measures aimed at reducing developers' debt levels and curtailing financial risks in real estate — amid a broader push to limit speculation in home prices.
— Evelyn Cheng, Jihye Lee
Bitcoin on 13-day winning streak, surpasses $20,000
According to CoinMetrics, bitcoin rose 2.59% in the past 24 hours and last stood at $21,271.41.
— Jihye Lee
Japan wholesale prices rise faster than expectations
Japan's producer prices, or wholesale prices, rose 10.2% in December compared with a year ago, according to official data.
That was higher than a rise of 9.5% expected by economists polled by Reuters and marked the third consecutive rise in monthly readings.
The nation's producer prices rose 0.5% on a monthly basis, also higher than expectations to see a 0.3% increase.
— Jihye Lee
CNBC Pro: Analysts love these 12 cheap stocks — and give one 70% upside
2022 was a bad year for many investors, with most stocks — especially tech — plummeting to levels not seen since 2008.
But there could be some opportunities in the chaos, with a number of companies trading at steeper discounts on a price-to-earnings basis than they have in recent history.
CNBC Pro screened for these names that are also Wall Street favorites.
— Weizhen Tan
Week ahead: China industrial output, retail sales, GDP and Bank of Japan rate decision
A slew of economic data is expected for the week of Jan. 16 — including China's industrial output and gross domestic product as well as the Bank of Japan's rate decision.
On Monday, South Korea will publish revised trade data and Indonesia will release its trade balance for December. India is slated to publish its wholesale price index, which economists polled by Reuters expect eased to 5.6% in December.
China on Tuesday will release retail sales, industrial output, urban fixed asset investment for December as well as its gross domestic product for the quarter. Singapore will publish its non-oil exports for December on the same day.
On Wednesday, the Bank of Japan will conclude its monetary policy meeting and will likely maintain its ultra-low interest rates. Investors will look for clues into who may be Governor Haruhiko Kuroda's successor and a potential policy shift ahead.
Japan is scheduled to publish machinery orders for November on the same day while Malaysia releases December trade data.
On Thursday, Malaysia's central bank will announce its monetary policy rate while Australia releases its employment figures.
China is scheduled to publish its one-year and five-year loan prime rates on Friday. Japan's consumer price index for December is also expected.
— Jihye Lee
Inflation outlook softens again, traders fully price in quarter-point rate hike
Declining inflation expectations from consumers is coinciding with expectations that the Federal Reserve is likely to step down the level of interest rate increases in a few weeks, and end them altogether soon.
The University of Michigan consumer sentiment survey on Friday showed the one-year inflation outlook down to 4%, the third straight monthly decrease and the lowest level since April 2021.
At the same time, traders assigned a 94.2% chance of a 0.25 percentage point interest rate increase on Feb. 1, when the Fed's next two-day meeting concludes. That marks another a smaller move than the 0.5 percentage point hike in December, which itself was a deceleration from four straight 0.75 percentage point increases.
"Inflation expectations are well-anchored and improving as pricing pressures are weakening across many sectors. The Fed will likely hike by 0.25% at the upcoming meeting later this month," LPL Financial chief economist Jeffrey Roach said. "We shouldn't be surprised if the Fed starts talking about pausing in the near future."
Consumer sentiment rises for second straight month
The University of Michigan said its consumer sentiment index rose for a second month in a row, although it remains at a historically low level. The index climbed to 64.6 from 59.7 in December. Still, it remains about 4% below its level from the prior year.
"Uncertainty over both inflation expectations measures remains high, and changes in global factors in the months ahead may generate a reversal in recent improvements," said Joanne Hsu, Surveys of Consumers director.
— Fred Imbert
CNBC Pro: Want a Tesla alternative? Analysts and fund managers reveal their top EV stocks
Once an investor favorite to play the electric vehicle boom, Elon Musk's Tesla has had a tough time of it of late. On Thursday, the EV maker cut prices in the U.S. and throughout Europe in what's being viewed as an effort to boost sales volumes.
— Zavier Ong
How will the Fed react to falling inflation, bank CEO recession warnings?
A negative inflation reading on Thursday combined with warnings of a mild recession from major banks on Friday could be signs that the Fed will pause soon or even cut rates this year, but that would require another change in direction from the central bank.
"You don't have to agree with the Fed's policy to believe them," said Lauren Goodwin, economist and portfolio strategist at New York Life Investments.
Goodwin pointed out that the overwhelming majority of Fed voting members were projecting a Fed funds rate 5% or higher this year in the last meeting. And given the concern some central bankers have expressed about the consequences of pausing too soon, they may be determined to hit that mark.
"With a relatively high degree of unification and conviction, they have said that they're going to bring the policy rate to 25 basis points higher than what the market says. And frankly unless we saw a slowdown in inflation or collapse in economic growth quickly ... I don't think they're going to change their minds," Goodwin added.
CNBC Pro: Fund manager names two U.S. stocks he thinks might not survive 2023
Businesses that relied on "free and infinite capital" are now facing a harsh reality, according to fund manager Trent Masters, and could even go bankrupt.
— Ganesh Rao