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Upbeat earnings from JPMorgan (JPM.N) helped lift some financial stocks in the region, but mining stocks struggled after China on Friday raised banks' required reserves (RRR) for the fourth time in over two months, fuelling worries the country's voracious appetite for commodities will cool.

"With growth still strong, Beijing will likely battle inflation wholeheartedly. Get ready for more hikes in both RRR (at least another 150 bps) and interest rates (two, 25 bps) in the next six months," HSBC economists Qu Hongbin and Sun Junwei wrote in a report.

Japan's Nikkei index .N225 rose 0.4 percent, helped in part by gains in financial shares. Sumitomo Mitsui Financial Group (8316.T) climbed 0.7 percent.

"The market is recouping losses made last week and sentiment has been brightened by financials gaining on a strong start to the U.S. earnings season," said Yumi Nishimura, a senior market analyst at Daiwa Securities Capital Markets.

Stocks elsewhere in Asia were more subdued, with MSCI's index of Asia Pacific shares excluding Japan .MIAPJ0000PUS slipping 0.3 percent.

Hong Kong's Hang Seng index .HSI, Australia's S&P/ASX 200 index .AXJO and China's Shanghai Composite Index .SSEC were all lower. South Korea's KOSPI .KS11 hit a record high at 2,118.86, before paring gains to be little changed on the day.

Global miners BHP Billiton (BHP.AX) and Rio Tinto (RIO.AX) both fell about 1.0 percent.

According to EPFR Global, flows into the emerging market equity funds that it tracks slowed in the week ended January 12 due to worries that high inflation rates will trigger more measures to rein in price pressures.

But underlying appetite for risk persisted, with emerging market local currency and high yield bond funds enjoying solid weeks, EPFR noted.

Asian high-yield bond issuers have wasted no time this year in taking advantage of the healthy appetite for their paper.

Last week, PRC property developer Evergrande Real Estate Group made history with a 9.25 billion yuan ($1.4 billion) synthetic renminbi bond issue, the biggest to date in the fast growing market.

EURO ZONE MEETING EYED

The euro slipped to $1.3338, having rallied some 4 percent last week to reach $1.3456 on Friday -- a high not seen since mid-December.

European Central Bank President Jean-Claude Trichet's tough talk on fighting inflation and expectations that the EFSF rescue fund will be expanded had helped underpin euro.

The last time Hu and President Barack Obama met face-to-face was at the Group of 20 leaders summit in Seoul in November, when Washington was on the defensive because of widespread criticism over the Federal Reserve's $600 billion bond-buying program.

Instead of pressuring China to allow its yuan currency to rise more rapidly, Obama found himself trying to convince allies that the United States was not intentionally devaluing the dollar to gain a trade advantage.

Back then, China's Vice Foreign Minister Cui Tiankai said "they owe us an explanation" over the Fed's bond buying, and admonished the U.S. central bank to "consider the impacts on other countries in the world when they make their decisions, not just their own economy."

The circumstances will look a little different when Hu visits the White House on Wednesday.

Currency tensions have cooled somewhat. China's high inflation means the yuan has appreciated in real terms considerably more than the nominal exchange rate shows.

Republican party gains in Congress suggest there may be less pressure coming from lawmakers to label China a currency manipulator or impose stiff new tariffs.

"There isn't the unified sense that there was before the mid-term elections that the U.S. needs to go after China," said Eswar Prasad, a Brookings Institution economist and former International Monetary Fund official.

As for those fears about the Fed inflicting dollar damage, the dollar has actually strengthened against a basket of currencies since the central bank announced its bond-buying plan in early November.

Hu will also be able to point to China's latest trade data showing December exports were not as strong as most economists expected. Comparable U.S. data is not yet available, but figures for November showed exports to China hit a record high of $9.5 billion, bolstering China's argument that it is doing its part to rebalance global growth.

Cui, the vice finance minister, once again spoke out ahead of this week's summit, but his tone was softer than in November. His most pointed comment was that Beijing would welcome assurances its financial assets in the United States were safe.

Treasury Secretary Timothy Geithner shrugged that off as nothing more than "the kind of things that you typically see ... foreign ministry people say in the run-up to these meetings. It's the typical pattern, nothing exceptional or interesting in this."

SORE SPOTS

To be sure, there are still plenty of trade frictions.

The U.S. trade deficit with China swelled to $252.4 billion through November, up 21 percent from the same period a year earlier. China's foreign exchange reserves climbed to $2.85 trillion in December, much of it held in dollar-denominated assets, making China Washington's largest creditor.

Strong results from JPMorgan Chase & Co (JPM.N) on Friday bolstered expectations for top U.S. banks, many of which are due to report next week, including Citigroup (C.N) and Goldman Sachs (GS.N).

Financials have been among market leaders in the recent rally, with the Standard & Poor's 500 .SPX posting its seventh straight week of gains on Friday.

While the earnings outlook is keeping alive hopes that stocks have more room to run higher, the rise in bank shares has pushed sector indexes to near resistance levels, which could signal a rest stop for the shares in the holiday-shortened week.

The market will be closed Monday in observance of Martin Luther King Jr Day.

JPMorgan Chase on Friday reported profit and revenue that were stronger than analysts had expected, and the CEO said the bank could start to increase its dividend once regulators give the go-ahead, likely at the end of March.

Analysts said the news bodes well for other financials, most of which are due to report results next week.

"Financials could very easily be one of the real darlings of this particular earnings cycle," said Burt White, managing director and chief investment officer of LPL Financial in Boston.

Financials are projected to have by far the highest growth rate in earnings for the fourth quarter, largely because of easy year-ago comparisons, according to Thomson Reuters data.

Overall, S&P 500 earnings are expected to have increased by 32 percent from a year ago, the data showed.

Besides the banks, economic bellwether General Electric (GE.N) as well as marquee tech names Apple (AAPL.O), Google (GOOG.O) and eBay (EBAY.O) are due to report.

DREAMING OF BANK DIVIDENDS

Investors have been keen for news on when bank dividends will be reinstated, and when it happens, it's going to mean more investment in financials, White said.

"Once they start (paying dividends) ... you're going to see an enormous amount of buying from yield-starved investors, as well as funds and ETFs (exchange-traded funds) that really are going to have to relook at the landscape and put financials back in there," he said.

Among other top banks reporting next week are Morgan Stanley (MS.N), Bank of America (BAC.N) and Wells Fargo & Co (WFC.N).