[WELLINGTON[ Asian stocks rose with US equity index futures and Australia's dollar as a rebound in oil bolstered risk appetite ahead of policy meetings this week by the Federal Reserve and the Bank of Japan.
An MSCI gauge tracking regional stocks outside of Japan, where markets are shut Monday for a holiday, rose following its biggest weekly drop in three months and futures foreshadowed rallies in US and UK equities.
The Aussie and Mexico's peso led gains among the currencies of oil-exporting nations, with crude climbing from a one-month low as fighting disrupted supplies from Libya amid prospects major producers will reach an agreement to help stabilize prices. Benchmark bonds in Australia and New Zealand fell, lifting yields to their highest levels since June.
Volatility has picked up in financial markets over the past two weeks amid concern central banks in Europe and Japan are becoming reluctant to loosen monetary policy further at a time when the Federal Reserve is deciding on the timing of the next US interest-rate increase. Economists are split over what, if any, action the BOJ will undertake in a review on Wednesday.
While the chance of a Fed hike the same day remains around 20 per cent, a steeper-than-projected increase in US consumer prices boosted the dollar on Friday.
"World markets appear to be taking this week's Fed meeting seriously," said Ric Spooner, a chief market analyst at CMC Markets in Sydney.
"While the Fed may not go as far as lifting its rate this week, it remains possible that it could move to a more explicit tightening bias."
Markets in South Korea return after a three-day break, while those in mainland China and Taiwan were shut on Thursday and Friday. Hong Kong and Malaysia were closed on Friday.