The buoyant regional mood propelled oil prices up by more than $1.50 a barrel, while stocks in Tokyo rose to their highest level in over six months, as investors were cheered by Saturday's 0.5 percentage point cut to banks' reserve requirement ratio from the People's Bank of China.
The move signaled that Beijing is keen to continue its efforts to support growth in Asia's biggest economy.
"Even though (the PBOC move) was expected, I think it is significant, and we are yet to see the full effect on global markets," said Sydney-based RBS Morgans principal investment adviser Christopher Macdonald. "It gives confidence that China will restock the core commodities of coal, iron ore and copper, so I would expect the follow-though effects to take a few weeks."
Indications that negotiations over a crucial second bailout package for Greece are likely to be finalized this week further bolstered sentiment.
Japan's Nikkei Stock Average rose 1.3% to 9506.05—the first breach of the 9500 mark since early August last year; Australia's S&P/ASX 200 advanced 1.0%, South Korea's Kospi Composite climbed 0.7% and New Zealand's NZX-50 added 0.8%.
Dow Jones Industrial Average futures were up 77 points in screen trade.
The safe-haven U.S. dollar was broadly lower, as the upbeat mood benefited riskier currencies such as the euro and many of the regional currencies, including the Australian and Singapore dollars.
The focus for the euro will turn to the Eurogroup meeting later in the day. "Greece headline risks remain, but today's Eurogroup meeting should clear uncertainty about the implementation of the second bailout package," Credit Agricole said in a note.
The single currency was at $1.3209 against the greenback, from $1.3139 late Friday in New York, and at ¥105.10 against the yen, from ¥104.54. The dollar was unchanged at ¥79.58, from ¥79.58. The Australian dollar rose above 1.0800 briefly and was recently at US$1.0790, from US$1.0774 late Friday in Sydney.
Regional stock markets took heart from China's policy easing measures and encouraging developments around Greece, with exporters and financial stocks leading a broad rise for cyclicals.
A weaker yen provided an additional spark for Japanese exporters, with Sony up 2.3% and Toyota Motor up 1.6%. The PBOC's action also drove China-linked firms such as Fanuc and Komatsu higher, up 1.9% and 3.0%, respectively.
In Seoul, Samsung Electronics rose 1.0% and Hyundai Motors added 0.7%. Many of the financial and oil stocks in the region advanced, with Mizuho Financial Group up 0.9% and oil explorer Inpex up 3.2% in Tokyo, while ANZ Bank advanced 1.6% and Woodside Petroleum rose 1.4% in Sydney.
Bluescope Steel underperformed the Australian market, falling 2.5% after posting a sharply wider first-half net loss due mainly to restructuring costs.
Spot gold was at $1,732.30 per troy ounce, up $8.50 from its New York settlement on Friday. March Nymex crude oil futures rose $1.55 to $104.79 per barrel on Globex.
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