MSCI's broadest index of Asia-Pacific shares outside Japan was up about 0.1 percent on the day, but up more than 1 percent for the month. Japan's Nikkei stock average (.N225) added about 0.8 percent, clawing back some of the 1.1 percent lost the previous session, its biggest one-day drop in two weeks. Mostly upbeat data released before the market open showed Japan's core consumer inflation slowed for a fifth straight month in December due to slumping oil prices, though factory output rose 1.0 percent, helped by a much-awaited rebound in exports and the jobless rate fell. According to Japanese government and central bank officials, the Bank of Japan has put monetary policy on hold and found backing for its wait-and-see stance from advisors to Prime Minister Shinzo Abe, who worry more easing could send the yen to damagingly low levels.
The U.S. economy likely grew at a brisk clip in the fourth quarter as lower gasoline prices buoyed consumer spending, in a show of resilience despite a darkening global outlook. "The consumer did the heavy lifting and I don't think there is any reason to expect that to change in the first half of this year because of the enormous tailwind from lower gasoline prices," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, is expected to have advanced at a pace of at least 4 percent in the fourth quarter - which would be the fastest in four years and an acceleration from the third quarter's 3.2 percent pace. Gasoline prices have plunged 43 percent since June, according to U.S. government data, leaving Americans with more money for discretionary spending.
Google Inc's (GOOGL.O) (GOOG.O) revenue grew 15 percent in the fourth quarter but fell short of Wall Street's target on declining online ad prices and unfavorable foreign exchange rates. Shares of Google edged up 0.1 percent to $510.66 in extended trading after an initial dip on the news. Google's advertising revenue has come under pressure as more consumers access its online services on mobile devices such as smartphones and tablets, where ad rates are typically lower. The growing popularity of mobile devices has made No. 1 social network Facebook Inc (FB.O) a greater threat in the battle for advertisers.