Japan's Nikkei average dipped 0.2 percent on Monday, after earlier hitting its highest point in six months, as Toyota Motor Corp skidded after forecasting a much bigger?than?expected $8.6 billion annual loss. But financial shares such as Mizuho Financial Group surged on optimism about the U.S. banking system and the economy as regulators said most U.S. banks were sound. The market is finding it hard to keep surging after rising 34 percent so far from an intra?day low hit on March 10.

U.S. job data on Friday added to optimisim about the U.S. economy. The 539,000 jobs cut by employers in April was the smallest reduction since October, and hinted at some improvement in the U.S. labour market.

U.S. stocks should rally this week, and push the Dow into positive territory for the year, with bank stress tests out of the way and investors hopeful retail sales will reinforce views the economy is on the mend.

The week may provide clarity on whether the recent signs of stabilization are translating into profits, with Wal?Mart Stores Incamong several big retailers due to post quarterly results. A speech by Federal Reserve Chairman Ben Bernanke about the financial system's condition on Monday will keep the spotlight on what's ahead for banks.

And as the first?quarter earnings season is winding down, the spotlight will fall on anything that could spark more hopes the recession that started in December 2007 is waning.

According to Thomson Reuters data, through Friday about 85 percent of the S&P 500 companies had reported their quarterly results, and 65 percent beat estimates, 8 percent came out in line, and 28 percent missed projections.

Hong Kong stocks opened little changed on Monday, with some caution on China's economic recovery holding back investor interest. Back at home market will see less activity this week on fear of result of election to be declared on 16th May. Today market is expected to open flat and remain subdued during the day.