Equities were mixed on Monday in Asia, with investors gearing up for policy decisions at major central banks this week and concern over the Chinese economy continuing to dampen sentiment.
With recent data releases suggesting inflation is now coming down after more than a year of interest rate hikes, hope is building that officials are close to bringing an end to their tightening cycles.
The key focus will be on the Federal Reserve, which is widely expected to announce another increase in borrowing costs, while traders are looking for guidance on its plans after that.
Debate is swirling about whether or not it will call it a day or keep going in order to bring inflation down to its two percent target, from the current three percent.
A string of positive data in recent months has given the Fed some room to take its foot off the pedal and allow the economy to avert a feared recession.
"The Fed should not signal another skip in September, as doing so for the June meeting really handcuffed the Fed at a time when it needed maximum flexibility," said Win Thin at Brown Brothers Harriman & Co.
"Given how firm the labour market remains, we believe the right thing for the Fed to do is to emphasise a more data-dependent approach and stress that a skip in September should not be assumed."
And Deutsche Bank economists wrote in a recent note to clients that they "see the line between mild recession and soft landing as increasingly fine and view the probabilities of the latter outcome undeniably on the rise".
Goldman Sachs has cut its probability of recession in the next 12 months to 20 percent from 25 percent.
"Recent data have reinforced our confidence that bringing inflation down to an acceptable level will not require a recession," the bank's chief economist Jan Hatzius wrote in a note to investors.
After a tepid Friday on Wall Street -- though one that saw the Dow chalk up a 10th successive gain -- most of Asia rose.
Tokyo, Seoul, Shanghai, Taipei, Bangkok, Jakarta and Wellington were all up, but Hong Kong, Shanghai, Sydney, Mumbai, Manila and Singapore retreated.
London, Paris and Frankfurt also fell.
The yen strengthened slightly after taking a heavy hit against the dollar late last week following a report that said the Bank of Japan was unlikely to alter its ultra-loose monetary policy at Friday's meeting.
While inflation was on the rise, Bloomberg said officials had hinted the BoJ would stand pat on its yield curve control programme, which sees it control the range in which it allows government bonds to fluctuate.
The yen has tumbled against the dollar this year as the BoJ refused to tighten policy even as the Fed pushed its own rates higher.
The euro was slightly down against the greenback ahead of an expected hike by the European Central Bank this week.
Investors continue to fret over the outlook for China's economy after last week's data showing slower-than-expected growth in the second quarter.
They will be keeping a close eye on a key Politburo meeting this week, hoping for some stimulus measures, with recent pledges of support seen as not going far enough.
But with Beijing's hands tied by vast local government debt and a desire to avoid the bubble-causing policies seen in the past, analysts said there was little scope for the sort of big-time announcement traders were craving.
Bruce Pang, of Jones Lang LaSalle, said: "There won't be much aggressive stimulus policies that markets were expecting."
