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Hong Kong - Tokyo led most Asian markets higher on Tuesday as exporters were lifted by a weakening yen, while tighter Chinese inflation data also provided support.
However, gains were tempered by losses in energy firms after a slump in crude prices as the wildfires sweeping Canada's oil-sands region abated.
Japanese stocks advanced for a second day as the dollar made up more ground against the yen after Friday's US jobs report provided hope for the economy but was weak enough to suggest any Federal Reserve interest rate hike would be gradual.
The Nikkei index ended the morning 1.5% higher as the dollar climbed to ¥108.70, up from ¥108.34 in New York and sharply higher than the ¥105.50 troughs touched last Tuesday.
Toshihiko Matsuno, chief strategist at SMBC Friend Securities, told Bloomberg News: "We're more likely to see a weakening yen this week. The Japanese currency has fallen to within the levels assumed for it by exporters, so investors will be able to buy the shares again."
Shanghai reversed early losses to rise 0.10% after inflation came in above two percent again last month while the fall in prices paid at factory gates also eased.
The figures provided some small hope for the world's number two economy after weekend data showed another fall in exports and imports.
Oil resumes losses
"We are witnessing a reversal of the deflation process," Larry Hu, head of China economics at Macquarie Securities Ltd. in Hong Kong, wrote in a recent note.
"While deflation is very painful, the reversal of it could also lead to higher nominal growth and inventory restocking."
Among other markets, Sydney was up 0.1% and Seoul added 0.4%. However, Hong Kong slipped 0.3%.
Hopes that European leaders will agree to a deal to release fresh bailout cash to Greece provided some cheer after Greece's parliament voted for more pension cuts and tax hikes.
However, regional energy firms retreated with oil prices as the biggest threat to Canada's reserves seemed to be over with rain and cooler temperatures slowing fires that have raged for more than a week. The news allowed traders to turn their attention back to the ongoing global supply glut.
The Brent crude contract was down 0.1% in Asia having lost almost 4% on Monday while West Texas Intermediate shed 0.4%, extending near three percent losses.
Hong Kong-listed CNOOC fell 1.6% and PetroChina was off 1.7% while Inpex in Tokyo fell 0.5% and JX Holdings was 0.8% lower.
Manila's stock market fell 0.5% after anti-establishment politician Rodrigo Duterte claimed victory as the new president of the Philippines after a profanity-laden campaign that included threats to impose one-man rule if lawmakers disobeyed him and promises to embrace communist rebels.
Philippine shares have fallen more than five percent over the past six weeks as Duterte looked set for victory with traders concerned about his economic plans.
