Asian stocks were mixed Monday following small gains on Wall Street as investors grow increasingly optimistic that the Federal Reserve has come to the end of its interest rate hiking cycle.

After a string of reports pointing to slowing inflation and a cooling jobs market, traders are shifting back into riskier assets as they bet on a loosening of financial conditions in the new year, with many eyeing rate cuts.

The focus will be on the release later in the week of minutes from the Fed's November policy meeting, where officials held borrowing costs and hinted that they could be finished with their tightening campaign.

"While the Fed is likely pleased with the evolving data, the minutes will be scrutinized in the context of easier financial conditions since the meeting and a more favorable macro environment supporting the soft landing narrative," said SPI Asset Management's Stephen Innes.

All three main indexes on Wall Street ended slightly higher Friday, while observers said they expected this week to see light trading heading into the Thanksgiving holiday.

Asian markets fluctuated in early business.

Tokyo went into the break slightly lower, having briefly hit a 33-year high in the morning, while Hong Kong rose after Friday's hefty loss fuelled by a 10 percent collapse in e-commerce titan Alibaba.

The market heavyweight gained more than one percent on Monday.

There were also gains in Sydney, Seoul, Jakarta, and Wellington, but Shanghai, Singapore, Taipei and Manila were in the red.

However, Marty Dropkin, of Fidelity International, warned that the path might not be completely risk-free.

"The risk… is that with yields falling and equities rising, financial conditions are loosening," he said in a note.

"If that continues to such an extent that the Fed becomes unsettled, potentially with some upside surprises in inflation prints, the Fed may reassert its hawkish rhetoric, which could spark volatility. That is probably more of a story for next year, and in the short term a year-end rally in equities is looking credible."

Expectations that interest rates will more than likely come down instead of rising further weighed on the dollar, which struggled to recover from last week's losses.

And crude prices edged up, extending Friday's gains of more than four percent ahead of a meeting of OPEC and other key producers, where Russia and Saudi Arabia could extend output cuts.