Asian markets were mixed Thursday, despite a positive lead from Wall Street and news that Chinese manufacturing activity hit a two-year high in January.
The yen retreated after a two-day rally as Japan logged a record trade deficit for last year, with exports hit by the ongoing territorial spat with China and Europe's long-running debt crisis.
Tokyo reversed early losses thanks to the yen's dip, with the Nikkei up 1.28 percent, or 133.88 points, at 10,620.87, while Sydney rose 0.47 percent, or 22.4 points, to 4,810.2, but Seoul shed 0.80 percent, or 15.93 points, to 1,964.48.
Shanghai fell 0.79 percent, or 18.31 points, to 2,302.60, with profit-takers moving in after the index hit an eight-month high in intra-day trade, while Hong Kong shed 0.15 percent, or 36.20 points, to 23,598.90.
In China HSBC said its preliminary purchasing managers index (PMI) rose to 51.9 in January from 51.5 in December, its highest since January 2011.
Anything above 50 indicates growth while anything below is contraction.
The news reinforces views that the world's number two economy has picked up after a drawn-out slumber. On Friday official figures showed gross domestic product grew at a faster pace than expected in 2012 and at a quicker pace than the government had hoped.
The results provided a fillip to Japan's Nikkei, while data showing Japan suffered a second consecutive annual trade deficit last year sent the yen tumbling, providing shares with another lift.
Official figures from the finance ministry showed Japan's trade shortfall last year totalled 6.92 trillion yen ($78 billion), with the deficit in December alone standing at a higher-than-expected 641.5 billion yen.
The yen had enjoyed a two-day rally from Tuesday and equities slumped, after the Bank of Japan disappointed dealers with its two percent inflation target and indefinite monetary easing, which they said was not enough.
In afternoon currency deals the greenback bought 89.32 yen, compared with 88.56 yen in New York late Wednesday. The dollar, however, is still down from the two-and-a-half-year high 90.24 yen before the BoJ move.
The euro bought 118.70 yen from 118.00 yen, and $1.3298 from $1.3315.
The three main indexes on Wall Street ended higher after a string of upbeat earnings from firms including IBM and Google.
The Dow ended up 0.49 percent, at its highest level since October 2007, while the S&P 500 advanced 0.15 percent and the Nasdaq climbed 0.33 percent.
However, after US markets closed Apple released flat October-December first quarter earnings and sales of key products such as the iPhone 5 came in below expectations.
Recently the iPhone 5 made a lacklustre debut in China and an analyst reported that Apple had cut orders for smartphone parts.
Wednesday's results sent shares in the computer giant slumping more than 10 percent in after-hours trade.
Regional firms linked to Apple ended mixed Thursday after beginning the day in negative territory.
Supplier LG Display fell 1.21 percent in Seoul, but in Tokyo TDK added 0.96 percent and telecoms firm Softbank, which sells the iPhone, was up 0.27 percent.
South Korean shares were also hurt by data showing the economy grew 2.0 percent in 2012, its slowest pace in three years, owing to overseas turmoil and soft demand at home.
Oil prices were mixed. New York's main contract, WTI light sweet crude for delivery in March gained 15 cents to $95.38 a barrel in the afternoon while Brent North Sea crude for March delivery dropped 18 cents to $112.62.
Gold was at $1,677.37 at 1040 GMT compared with $1,691.66 late Wednesday.
In other markets:
-- Taipei fell 0.62 percent, or 48.19 points, to 7,695.99.
TSMC fell 1.09 percent to Tw$99.9 while HTC was 0.88 percent lower at Tw$281.0.
-- Manila closed 0.41 percent higher, adding 24.74 points to 6,117.27.
Ayala Corp. rose 2.26 percent to 542 pesos, Metro Pacific Investments added 1.25 percent to 4.86 pesos and Philippine Long Distance Telephone was 0.22 percent up at 2,792 pesos.
-- Wellington was flat, edging up 2.19 points to 4,189.91.
Telecom rose 0.86 percent to NZ$2.34, Fletcher Building was down 1.61 percent at NZ$9.19 and Contact Energy was steady at NZ$5.20.
-- Singapore closed up 0.53 percent, or 17.16 points, to 3,248.39.
Singapore Telecommunications gained 1.17 percent to Sg$3.47 and Oversea-Chinese Banking Corporation added 0.31 percent to Sg$9.70.
Bangkok added 0.69 percent or 9.89 points to 1,449.09.
-- Airports of Thailand gained 4.69 percent to 111.50 baht, while Bangchak Petroleum edged up 6.62 percent to 36.25 baht.
-- Mumbai fell 0.51 percent, or 102.83 points to 19,923.74.
-- Jakarta and Kuala Lumpur were closed for public holidays.