Asian stocks move higher on Wall Street lead, oil steady

Asian markets opened with cautious optimism on Monday, following a global rally as traders reacted to the US Federal Reserve's potential interest rate hike. MSCI's Asia-Pacific index, excluding Japan, rose by 0.1%, driven by a strong performance from South Korean shares. Japan's Nikkei, however, fell 0.3%. The S&P 500 e-mini futures also saw a slight increase of 0.1%.

Investors took heart from recent US manufacturing data, which indicated a surge in activity to its highest level in over four years in July, driving the Dow Jones Industrial Average to a new high.

Chris Weston, head of research at Pepperstone Group in Melbourne, commented, "Risk markets have clearly turned a corner." He further stated, "If the constructive tone from European and US equity markets persists, buyers should emerge early in the session and provide support for regional risk assets."

Oil prices experienced modest gains as Asian markets reopened, with Brent crude climbing 0.6% to $84.29 a barrel. This rise came after the price had plummeted to a three-week low on Monday due to US President Donald Trump's decision to refrain from launching a fresh strike on Iran, seen as a goodwill gesture during ongoing peace talks. Tehran, however, has denied any negotiation efforts.

The US dollar strengthened slightly, with a 0.3% increase against the yen, reaching 157.625 yen. This gain was attributed to coordinated interventions by US and Japanese authorities aimed at supporting the yen last week. The US dollar index also hit a low not seen in the past two months, at 99.99. The yield on the US 10-year Treasury bond rose by 0.2 basis points to 4.684%.

Despite the optimism in stock markets, markets continue to anticipate an interest rate increase at the Federal Reserve's September meeting. Fed funds futures suggest a 65% probability of a 25-basis-point hike during the upcoming two-day meeting, scheduled for September 16. Federal Reserve Bank of New York President John Williams expressed optimism that inflation pressures are set to ease gradually, but emphasized that the Fed would hike rates if inflation does not decelerate.

In the cryptocurrency market, both Bitcoin and Ether experienced a 0.5% decline, settling at $63,446.35 and $1,857.44, respectively.