European shares posted modest gains during a quiet trading session ahead of key economic data this week from the United Kingdom.

Britain's benchmark FTSE 100 rose 16 points, or 0.3 percent, to be quoted at 6,170.17 - less than 15 points from its five-year peak.

Pearson plc, the publisher of the Financial Times and part owner of The Economist, was one of the day's biggest decliners, falling more than 3 percent on the session to 1,202.0 pence each after the company trimmed its full-year earnings forecast for 2012 and warned of "structural industry change" in the coming year.

In Europe, the region-wide FTSE Eurofirst 300 added 1.86 points, or 0.16 percent to trade at 1,165.48. The biggest mover in the European session was Swiss luxury goods maker Richemont, which fell more than 5 percent - the most in nearly 6 months - after the Cartier brand owner reported three month revenues of €2.9bn, just shy of analysts' estimates.

Trading on Wall Street was closed Monday owing to the national observance of the Martin Luther King Jr. public holiday.

Investors are awaiting the results of a two-day policy meeting from the Bank of Japan, the first since the election of new Prime Minister Shinzo Abe, expected early Tuesday morning London time.

Abe has vowed to reignite Japan's moribund economy with trillions in new stimulus and a new, bolder approach to monetary policy from his central bank. Governor Masaaki Shirakawa has been publicly sceptical of some of Abe's suggestion - which include doubling the bank's inflation target to 2 percent and significantly expanding asset purchases - but is expected to agree to the measures under the intense political pressure from both Abe and his finance minister, Taro Aso.

The yen rose marginally against the US dollar in thin trading to change hands at 89.6 after reaching a two and a half year low of 90.21 late last week. Japan's Nikkei 225 fell 1.5 percent to 10,747.74 while the broader Topix dipped 0.7 percent to 905.16.

Britain will published public sector borrowing figures Tuesday and key employment data from the Office of National Statistics Wednesday in what is likely to be at best a mixed set of numbers ahead of what is expected to be a grim reading of growth for the final three months of last year.

The fourth quarter GDP figure, set to be published Friday, is likely to show a 0.3 percent contraction for Europe's second-largest economy and raise concerns of not only a potential "triple-dip" recession but also the loss of Britain's coveted triple-A credit rating.

Sterling has been welded to a 10-month low against the resurgent euro and a 9-week trough against the US dollar ahead of the data and today traded at 83.86 and $1.5828 respectively.

In Europe, Eurozone finance ministers will meet for the first time this year in Brussels Monday to assess the economic situation in Spain and Greece and discuss the details of financial needs for Cyprus - which could rise to as much as €17.5bn but will unlikely be agreed until after Cypriots go to the polls to elect a new government next month.

Benchmark 10 year Spanish bond yield rose 6 basis points to 5.14 percent Monday following news that nation's Treasury was planning to use a group of banks to privately sell its next debt issue - as opposed to conducting a more typical public auction - in a move that traders interpreted as a signal that international investors were beginning to show reluctance for the low-yielding debt.