Asian shares traded mixed on Monday as fears of weaker earnings kept investors cautious, but improving economic prospects in Europe and solid U.S. profit reports provided some support to sentiment.
Japan's Nikkei share average dropped as investors secured profits on exporters as they awaited further cues from corporate earnings after the index briefly pierced a fresh 32-month high above 11,000 in early trade.
The Nikkei fell 0.9 percent to 10,824.31 after initially leaping to 11,002.86 as interest in Japanese exporters was fanned as the yen dropped to 91 versus the dollar, promising higher overseas revenues once they are repatriated. The broader Topix shed 0.4 percent to 913.78.
South Korean shares closed at a two-month low as a weakening yen compounded concerns about weak corporate earnings and the sour outlook.
Tech heavyweight Samsung Electronics fell 3.2 percent to 1.372 million won per share, its lowest closing since Nov. 20.
The Korea Composite Stock Price Index (KOSPI) declined 0.36 percent to close at 1,939.71 points.
China shares jumped to their best day in two weeks, sparking Hong Kong gains, as investors welcomed comments by a senior central bank official seen as a tacit admission that bank profits need to be protected.
In comments carried in multiple Chinese newspapers, Pan Gongsheng, a deputy governor of the bank, said that the pace and timing of freeing interest rates must consider banks' profitability and capability of replenishing capital, as the two factors affect credit supply to the whole economy.
The CSI300 of the top Shanghai and Shenzhen A-share listings jumped 3.1 percent, while the Shanghai Composite Index climbed 2.4 percent as volume spiked 38 percent from Friday.
Monday's gains were the best since Jan. 14 and helped onshore Chinese indexes close at their highest since mid-2012. They breached a trading range that has contained movements for about two weeks, pointing at further gains.
This lifted Hong Kong markets, helping the Hang Seng Index close up 0.4 percent at 23,671.9, though it failed again at chart resistance at about 23,708, its peak on May 31, 2011.
China Minsheng Bank surged 7.2 percent to its highest close in five years in Shanghai. Minsheng, which gained 33 percent in 2012, is up 27 percent in January.
Separately, profits earned by China's industrial companies rose 17.3 percent in December from a year earlier to 895.2 billion yuan ($143.91 billion), official data showed on Sunday, as a fourth-quarter recovery helped offset weaker corporate results in the third.
But in a sign that this recovery does not encompass all sectors, shares of China Cosco Holdings dived after the world's largest bulk cargo fleet operator said it expects a second-straight year of losses in 2012.
New Zealand shares ended marginally higher amid low turnover due to a holiday in Auckland and Australia. The benchmark NZX 50 index ended the day up 0.1 percent
In India, the benchmark BSE index traded flat ahead of the Reserve Bank of India's rate decision on Tuesday.
Finally, in Singapore, the Straits Times Index (STI) ended up 0.1 percent.
Australia and Malaysia markets are closed for a public holiday.