The South Korean won led gains among emerging Asian currencies on Monday ahead of a central bank meeting this week, while Taiwanese stocks rose over 2% after the island began rolling out its first domestically developed COVID-19 vaccine.
Currency markets strengthened after Dallas Federal Reserve President Robert Kaplan, among the US central bank's most forceful supporters for starting to reduce support for the economy, said on Friday he may need to adjust that view if the Delta variant slows economic growth materially.
"Fears of a sharp global growth de-rating and/or faster than expected Fed normalisation may be overdone... a case of Fed deferring its announcement to taper could see USD ease off," Maybank analysts said in a note.
The Bank of Korea's rate decision will be in focus this week after it gave strong indications last month an end to its run of pandemic era, record-low interest rates was coming.
The country's benchmark stock index, which has fallen in 10 of the last 12 sessions, gained 1.4%. The South Korean won rose as much as 0.6% against the greenback.
Taiwanese stocks were on course for their best day in three months on signs of progress in vaccinations.
Malaysia's stocks added 0.4% and the ringgit strengthened 0.2%. New Prime Minister Ismail Sabri Yaakob took charge on Saturday following the collapse of the administration of Muhyiddin Yassin due to coalition infighting.
"Some of the volatility witnessed in Malaysian assets through the uncertainty of last week will likely abate with the appointment of a new PM, " Mizuho Bank analysts said in a note.
Equity markets across the region rebounded from last week's sell-off, while investors also eyed Federal Reserve Chair Jerome Powell's speech at Jackson Hole later this week for more clarity on stimulus tapering.
Thai stocks hit their highest in over a month as the country's exports rose more than expected in July on improved global demand.
Philippines' equities were supported by reassurances from its central bank that current record low interest rates would not be changed anytime soon.