Most Asian stock markets gained ground on Thursday, led by Tokyo's 3.8 percent but Shanghai closed lower.
Japan's Nikkei Average hit a five-week high on Thursday as exporters jumped on a weaker yen, while metals shares climbed after gold hit a new record.
The benchmark index rallied 3.84 percent at 9,977.67 points. The broader Topix rose 3.4 percent to 888.04.
Mitsubishi Motors grabbed the spotlight today. Its shares soared nearly 20 percent after the Nikkei business daily reported that Peugeot Citroen is in talks to spend up to 300 billion yen ($3.4 billion) to acquire a 30-50 percent stake.
Mitsubishi Motors and Peugeot confirmed both were discussing an expansion of their existing partnership that could end in a capital tie-up, underscoring the intensifying pressure to consolidate in the fiercely competitive auto industry.
Stocks of Mitsubishi Motors' shareholders, such as trading house Mitsubishi Corp soared 17 percent.
Car battery maker GS Yuasa surged 7.6 percent to 684 yen on hopes for more demand, although Mitsubishi Motors' existing tie-up with Peugeot in electric vehicles has already secured GS Yuasa growing sales with the French auto group.
Mitsubishi Heavy Industries climbed 4 percent, Mitsubishi UFJ Financial Group gained 2.3 percent and trading house Mitsubishi Corp rose 3.9 percent to 2,130 yen.
Market players said the overall market likely received a boost from foreign buying partly because they took heart from recent moves by the government and the Bank of Japan on the economy.
Exporters surged, with Honda Motor up 4.4 percent at 2,990 yen and Canon gaining 4.2 percent to 3,490 yen. Toyota Motor climbed 4.5 percent to 3,720 yen.
Sumitomo Metal Mining and other metals shares gained as gold rose to a record high and after copper climbed as well.
Japan Tobacco jumped 7.7 percent to 277,100 yen after the Mainichi newspaper reported that the government's planned tobacco tax hike is likely to be a lot smaller than some had feared.
Seoul shares rose above the psychologically significant 1,600 level as investors bought into the market for the fourth session. Techs and shipyards fueled the advance but refiners underperformed after news they faced fines for alleged price-fixing.
The Korea Composite Stock Price Index (KOSPI) was up 1.47 percent at 1,615 points.
LG Electronics rallied 8.1 percent amid growing expectations about its fourth quarter earnings.
The world's No.2 memory chip maker, Hynix Semiconductor, gained 1.3 percent and Samsung Electronics advanced 1.6 percent after the Hynix's CEO said late on Wednesday that he expected a smaller-than-usual quarterly fall in DRAM revenue in January-March.
Shipbuilders rose across the board, helped by gains in the Baltic Dry Index, which tracks the price of shipping key commodities. Hyundai Heavy Industries climbed 2.3 percent and Daewoo Shipbuilding & Marine Engineering was up 1.38 percent.
Crude refiners underperformed on news that South Korea's anti-trust agency planned to impose fines totaling 669 billion won ($581 million) on four domestic refiners and two LPG companies.
Shares in SK Energy pared losses after losing 1.81 percent and GS Holdings retreated 1.1 percent.
Miners, Retailers Lift Australian Stocks
Australian stocks rose 0.3 percent. Gains in miners and retailers offset a fall in top home lender Commonwealth Bank of Australia as it held back from matching the central bank's rate hike.
Strong metals prices buoyed most of the miners, especially smaller prospectors, for a second straight day.
Mining firms were among the leaders after record prices for gold and higher copper prices on optimism over demand amid a global recovery. BHP Billiton, the world's top miner, rose 1.3
percent and smaller rival Rio Tinto finished flat.
Iron ore prospector Murchison Metals jumped 6.4 percent to A$2.01 in its heaviest trading in two years, adding to a 10 percent gain in the previous session. Its neighboring iron
ore explorer Gindalbie Metals rose 4.2 percent to A$0.99.
Farm chemicals maker Nufarm rose 3.2 percent, supported by a bullish earnings forecast and comments that A$13 was a fair price for its proposed takeover by Sinochem. The stock had fallen 9.4 percent in the previous two days on concerns about the delay of reaching an agreement between the two parties.
Investors bought up retailers after data showed October retail sales rose 0.3 percent and new vehicle sales surged 20 percent in November, showing buyers were undeterred by rate
Department store chain Myer jumped 2.1 percent to A$3.82, while electronics and furniture retailer Harvey Norman rose 1.1 percent to A$4.47.
National Australia Bank fell 0.4 percent to A$28.68 after it undercut Westpac by raising home lending rates by 25 basis points. Westpac rose 0.8 percent to A$24.46. Commonwealth Bank of Australia, yet to raise rates, fell 1.1 percent to A$54.11.
The benchmark S&P/ASX 200 index ended up 12.2 points at 4,774.6 points. New Zealand's benchmark NZX 50 index rose 0.1 percent to 3,153.9.
Taipei Closes at 1-Week High
Taiwan stocks inched up 0.09 percent to end at a one-week closing high, led by Cathay Financial, the island's biggest listed financial firm.
The main TAIEX share index rose 7.05 points to 7,684.67, its highest finish since Nov 26.
Shares of Cathay Financial advanced 3 percent after Reuters reported China's ICBC was in talks to buy a 20 percent Cathay stake that is potential worth $3.4 billion.
The Hang Seng Index rose 1.2 percent, or 368.73 points by the close. Stocks in Hong Kong rose for a fourth straight session, led by banks and property shares as investors hoped for economy growth.
Chinese property stocks extended recent gains on expectations of better earnings as the mainland economy remains on course for stronger growth, while many developers also hit their sales targets earlier than expected.
Shares of China Overseas Land rose 2.9 percent to a session high of HK$17.94, Shimao Property gained 6.5 percent to HK$16.5, and R&F Properties was up 5.7 percent at HK$15.26.
ICBC pared gains after climbing 1.2 percent to a session high of HK$6.82 on news that the Chinese bank was in talks to buy a 20 percent stake in Taiwan's Cathay Financial.
Shares of China Construction Bank gained 0.70 percent, and Bank of China rose 0.9 percent.
Gold counters rose after gold prices soared to record highs on Thursday. Zijin Mining rose 1.8 percent to a session high of HK$9.10. Sino Gold Mining climbed 1.7 percent to HK$61, its highest since March 2008, before trimming gains.
China's key stock index fell 0.3 percent as the market paused after three days of gains in a row. The Shanghai Composite Index lost 0.2 percent.
Bank shares eased amid expectations that bank lending will shrink next year, with the country's biggest lender, Industrial and Commercial Bank of China losing 1.31 percent to 5.26 yuan after rising 1.33 percent on Wednesday.
A central bank researcher said in remarks published on Thursday that Chinese banks would issue 5 trillion to 7 trillion yuan in new loans next year, down from more than 9 trillion this
Brokerage shares outperformed, buoyed by a positive market outlook and prospects for a pickup in business, with CITIC Securities advancing 2.02 percent to 30.37 yuan.
The steel sector was strong, with Baoshan Iron and Steel jumping 3.30 percent to 9.08 yuan.
Singapore Ekes Out Gains
Markets in Singapore and Malaysia saw little movement. The Straits Times Index inched up 0.4 percent while the KLCI was flat.
More From CNBC.com: