Boost for Asian shares, but eurozone in focus

Investors also mulled Wall Street's reaction to comments from Federal Reserve Chairman, Ben Bernanke, on an exit strategy from massive stimulus, which saw United States (U.S.) stocks pare recent gains as risk appetite withered.

Many investors were also watching for signs the European Union (EU) would move to address the debt troubles engulfing the eurozone ahead of a key meeting that will focus on the Greek debt crisis.

Chinese shares rose 0.10 percent as January's lower-than-expected inflation data eased concerns over imminent monetary tightening measures, dealers said.

In thin trading ahead of the week-long Chinese Lunar New Year holidays, which starts this weekend, the Shanghai Composite Index was up 3.0 points at 2,985.50.

Steel makers and gold miners were among the day's big gainers, as prices of commodities rose. Baoshan Iron & Steel rose 5.7 percent.

Hong Kong closed up 1.85 percent or 368.47 points, at 20,290.69, with local lender Bank Of East Asia up 3.0 percent.

China's consumer prices rose 1.5 percent in January from a year earlier, slowing from December's 1.9 percent, the National Bureau of Statistics said.

“This is good news for the market”, Qian Qimin, an analyst for Shenyin Wanguo Securities, told Dow Jones Newswires. “The inflation being slightly lower means less possibility for tightening measures in the near-term.”

But overheating risks were underlined by data showing soaring lending, as Chinese banks extended 1.39 trillion yuan (203.5 billion dollars) in new loans in January, compared to 379.8 billion yuan in December.

Massive lending has triggered fears that excess liquidity is fuelling inflation and feeding a spending spree by speculators, creating property and stock market bubbles.

Sydney closed up 40.9 points, or 0.9 percent, at 4,554.3 following the surprise drop in unemployment to 5.3 percent in January from 5.5 percent the previous month.

Materials, financials and energy were the top performers with mining giant Rio Tinto up 2.6 percent before reporting full-year profits were 33 percent higher at US$4.87 billion. Rival BHP Billiton rose 1.2 percent.

Tokyo and Taipei were closed for a public holiday.

EU heads of state and government will meet in Brussels this week for a summit focused on supporting Greece and preventing the crisis there from spreading to rest of the eurozone.

“There is an enormous amount of anticipation of an announcement on Greece,” RBS head of Sydney sales trading, Justin Gallagher, said.

“The market will need to see definitive action from the EU.”

Wall Street provided a weak lead, with the Dow Jones index falling 0.21 percent in thin trade. Bernanke's comments brought mixed reactions about when the Fed may exit from a massive stimulus.

In other markets:

— Seoul rose 1.76 percent, or 27.69 points, to 1,597.81 after the central bank froze key interest rate at a record low for the 12th successive month.

— Singapore closed 19.24 points, or 0.70 percent, higher at 2,753.63.

— Kuala Lumpur rose 0.26 percent, or 3.25 points, to 1,249.42.

— Manila closed 1.81 percent higher, as the composite index added 51.64 points to 2,908.88.

— Jakarta ended up 24.31 points, or 0.98 percent, at 2,507.75.

— Bangkok closed up 7.00 points, or 1.02 percent, at 695.41.

— Wellington fell 0.66 percent with the NZX-50 index down 20.23 points to 3,065.28.

— Mumbai rose 1.45 percent, or 230.42 points, to 16,152.59.

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