Asian stock markets mostly ended up with gains last week as sentiment was buoyed by hope that policymakers in Japan would announce stimulus measures to boost the growth of the world’s third-largest economy after their election while a private survey showed a rise in Chinese manufacturing activity in December.

Market participants might remain cautious as it is likely that Washington won't be able to reach a deal on the so-called fiscal cliff before Jan. 1, 2013. President Barack Obama had another meeting with House Speaker John Boehner at the White House, Thursday, to discuss how to avoid the impending fiscal cliff, a set of spending cuts and tax increases that will automatically take effect at the beginning of next year and threaten to push the U.S. back into recession. But the gap between the two parties remained wide and produced no breakthrough on the issue.

"A lot of firms are saying to their trading desks, 'You can take days off for Christmas, but you are on standby to come in, if anything happens.' This is certainly different from previous years, especially around this time of the year when things are supposed to be slowing down. Next week is going to be a Capitol Hill-driven market," J.J. Kinahan, chief derivatives strategist at TD Ameritrade in Chicago, told Reuters.

On the economic news front, reports on U.S. home sales, housing starts, personal income and spending for the month of November, the third revision on the U.S. Gross Domestic Product for the third quarter, and December consumer confidence will be released in the coming week.

Economists forecast that the housing starts in November might have declined 1.5 percent to 880,000 from 894,000 in the previous month. New home sales are expected to have increased 1.5 percent to 375,000 in November from previous month.

“The third revision to Q3 GDP will reflect upward revisions to private non-residential construction spending and government spending. Recent data in the Quarterly Services Survey also suggests that spending on services was greater in Q3 than in the second GDP estimate. We look for the rate of Q3 growth to be revised up to 3.0 percent from 2.7 percent,” said a note from Credit Agricole.

In Japan, the consumer price index and merchandise trade for the month of November are due to be released during the week. The merchandise trade deficit is expected to remain flat at 674.0 billion yen compared to 624.3 billion yen in October, while the consumer price index is likely to have declined 0.1 percent on an annual basis. Meanwhile, the Bank of Japan concludes its monetary policy meeting Thursday and is expected to increase the asset purchase fund by 10 trillion yen.