BEIJING (AP) -- Asian stocks mostly gained Monday after Japan's ruling party won a majority in parliament's upper house and a mandate to push ahead economic reforms. European markets fell.
Oil stayed above $108 a barrel amid signs of an improving U.S. economy.
Tokyo's Nikkei 225 gained 0.5 percent to 14,658.04 while China's benchmark Shanghai Composite Index added 0.6 percent to 2,004.76. Hong Kong's Hang Seng rose 0.2 percent to 21,356.03. Markets in Singapore, Seoul, Taipei and Sydney also gained.
In Europe, France's CAC-40 shed 0.1 percent to 3,921.76 while Germany's DAX lost 0.04 percent to 8,328.52. Britain's FTSE 100 dropped 0.2 percent to 6,622.18.
Futures augured weakness on Wall Street. Dow futures dropped 0.1 percent to 15,496 and S&P 500 futures were almost unchanged at 1,689.
Japanese shares were buoyed by Sunday's win by Prime Minister Shinzo Abe's Liberal Democratic Party, whose "Abenomics" program aims at sparking an economic revival.
"The results of Sunday's Upper House elections are probably the best outcome for the equity markets, especially if, as seems likely, the yen resumes its gradual decline," said Marcel Thieliant of Capital Economics in a report.
Chinese shares edged up after Friday's lifting of controls on interest banks can charge on loans. Sentiment was dampened by last week's data showing economic growth slowed for a second quarter.
The interest rate move, one element of long-promised financial reforms, could mean lower rates for more creditworthy borrowers and might help to boost growth. But analysts say the immediate impact will be limited because Beijing still caps interest paid on deposits, suppressing returns to savers and depressing consumer spending.
"Rate liberalization alone will not be able to address all the problems that China faces today," said Credit Suisse economists Dong Tao and Weishen Deng in a report. "The core issue today is that private investment interest weakened significantly."
Japan's stagnant economy is showing signs of perking up, helped by the aggressive monetary and fiscal stimulus that Abe has implemented since he took office in late December. Stocks have surged, business confidence is improving and the weaker yen has eased pressure on exporters.
Long-term growth requires changes to boost competitiveness and cope with Japan's rapidly graying population and soaring national debt.
Abe faces a decision this fall on whether to follow through on raising the sales tax next April from 5 percent to 8 percent, a move needed to shore up Japan's public finances, but one that many worry will derail the recovery.
By contrast, China's slowdown is deepening, prompting some analysts to say Beijing might need to launch a new stimulus to prevent a plunge in growth.
Economic growth fell to a two-decade low of 7.5 percent in the three months ending in June from 7.7 percent the previous quarter. Retail sales and investment growth also weakened, while surveys showed June manufacturing activity contracted.
New communist leaders who are in their first year in power are trying to shift the basis of China's growth from exports and investment to more self-sustaining domestic consumption. They say slower growth is acceptable but some analysts warn an accelerating downturn might force them to temporarily reverse course and step up government spending.
In currency markets, the dollar declined to 99.98 yen from the previous trading session's 100.6 yen. The euro rose to $1.3159 from $1.3141.
Benchmark crude for September delivery gained 34 cents to $108.21 a barrel in electronic trading on the New York Mercantile Exchange.