By Gina Lee

– Asia Pacific stocks were mostly up on Friday morning, steadying after U.S. counterparts hit a record high as concerns about the omicron COVID-19 variant’s impact on the global economic recovery continue to ebb.

Japan’s Nikkei 225 was steady at 28,798.37 by 9:06 PM ET (2:06 AM GMT), with data released earlier in the day showing that the national core consumer price index grew 0.5% year-on-year in November.

South Korea’s KOSPI gained 0.51% and in Australia, the ASX 200 gained 0.54%.

Hong Kong’s Hang Seng Index inched up 0.07%.

China’s Shanghai Composite was down 0.36% and the Shenzhen Component was down 0.21%

Volumes have thinned, and many markets are closed or operating with reduced hours for the holidays. Investors are turning from safe-haven assets toward riskier assets, with U.S. Treasuries slipping during the previous session. There is no cash trading of Treasuries on Friday.

Giving sentiment a boost, a U.K. study suggested omicron infections are less likely to lead to hospitalization. But it added that the variant may still produce a significant number of serious cases due to its infectiousness.

Across the Atlantic, Merck & Co . Inc. (NYSE:MRK) COVID-19 pill Molnupiravir received emergency use authorization from the U.S. Food and Drug Administration.

However, a laboratory study showed that two doses and a booster of Sinovac Biotech Ltd.’s vaccine did not produce sufficient levels of neutralizing antibodies to protect against omicron.

A global stock gauge is up some 3% in December, demonstrating the equity market’s resilience despite the risks posed by COVID-19. Diminishing liquidity support from central banks as they move to curb high inflation could also test markets in 2022.

“We certainly favor value into 2022 overgrowth and are much more on the short duration side both when we look at equities and fixed income,” Angel Oak Capital Advisors LLC portfolio manager Cheryl Pate told Bloomberg.

However, U.S. inflation could move still higher and that the Federal Reserve faces a delicate balancing act to check price pressures while maintaining the economic recovery, she added.

Former U.S. Treasury Secretary Lawrence Summers painted a darker picture, warning of a testing period for the U.S. economy in coming years, with the risk of recession followed by stagnation. The Fed had been late to spot the dangers of inflation, he added.

Although omicron “will create some slowdowns in the economy, perhaps some slowdowns of production which could add to inflation pressures in the short term,” that will fade and the economy will work its way through the situation, Wells Fargo (NYSE:WFC) Investment Institute head of global market strategy Paul Christopher told Bloomberg.