Asian equities started Thursday’s session largely higher, building on start-of-the-year strength as U.S. stocks continued to gain overnight, though Japan equities retreated slightly after their stout kickoff to 2017.

The Nikkei Stock Average NIK, -0.37% was down 0.3% in recent trade after gaining 2.5% on Wednesday, while Korea’s Kospi SEU, -0.18% was off 0.2%, but gains were logged in many other markets. Australia’s S&P/ASX 200 XJO, +0.29% was up 0.3% and Hong Kong’s Hang Seng Index HSI, +1.47% and Singapore’s FTSE Strait Times Index STI, +1.47% both advanced 1%.

Despite concerns of a depreciating Chinese yuan and more capital outflows in the region, a lot of the recent economic data have been pretty strong, notes Christoffer Moltke-Leth, director of global sales trading at Saxo Capital Markets,

“The world is ticking along pretty healthily,” he said.

China’s December Caixin services purchasing managers’ Index, a reading on the country’s nonmanufacturing economy, rose to 53.4 from 53.1. Meanwhile, Hong Kong’s PMI moved back into growth territory for the first time in nearly two years in December.

But despite Hong Kong’s improvement, IHS Markit economist Bernard Aw said there are concerns growth in other key variables such as output and new orders remained “elusive.” He added, “Chinese demand for Hong Kong’s products and services continued to wane. Overall client appetite remained sluggish, as reflected by lower volumes of output and new business.”

The Shanghai Composite SHCOMP, +0.26% was little changed.

Meanwhile, the modest drop in Japanese stocks — which includes exporters like Canon Inc. 7751, +0.03% dropping 0.4% and Toyota Motor Co. 7203, -0.68% declining 0.8% — comes as the yen has rebounded 0.6% against the dollar, which was lower versus most Asian currencies early Thursday following overnight weakness in the greenback.

The currency was lower ahead of the overnight release of the Federal Reserve’s December meeting minutes after hitting fresh 14-year highs Tuesday. Gains have been fueled by the potential of repeated U.S. interest-rate hikes this year, but the minutes highlighted “considerable uncertainty” about what President-elect Donald Trump’s administration may mean for policy and economic activity alike.