BENGALURU Asian shares rose while currencies treaded water against the US dollar on Monday, with South Korea's won rising most, as investors cheered additional stimulus measures in China and bet the US Federal Reserve's interest rate hike cycle has peaked.

Lacklustre trading persisted across the region since markets in the US were closed on account of a public holiday.

China has doubled down on stimulus measures to propel its Covid-19 ravaged economy, including relaxing home-purchase restrictions in a real estate sector that has been in a downward spiral for the last two years.

Elsewhere in the region, the won logged the most gains, rising more than 0.1%, while the Singapore dollar and Chinese yuan firmed about 0.1% each.

However, the Indonesian rupiah, Malaysian ringgit and Taiwanese dollar lost ground against the US dollar, losing 0.1% to 0.2%.

"I think by and large there should be continued pressure on Asian currencies, but they are more closely tied to China," Alvin Tan, Head of Asia FX Strategy at RBC Capital Markets, said.

"Taiwan dollar and the Malaysian ringgit will continue to be dragged way down, while others like the Indian rupee, which is kind of independent, could do better."

Multiple Asian equities advanced, with stocks in South Korea, Singapore, Taiwan and China rising 0.2% to 1%.

Risk confidence was buoyed as a rise in unemployment rate in the US countered a positive jobs growth report, pointing to the Fed opting not to raise rates in its upcoming Federal Open Market Committee meeting.

Market movement now implies a 93% chance of rates staying steady this month and a 67% chance of the entire tightening cycle being over.

Locally, investors will also watch for inflation data from China, Thailand and the Philippines this week to gauge how the respective central banks react in the face of continued elevated inflation.

  - Reuters