Asian currencies firmed on Monday, with the trade-sensitive South Korean won among top gainers, as the anticipated inking of a Phase 1 Sino-US trade deal later this week improved risk sentiment.

The won firmed to 0.7% to 1,153.10 per dollar, its strongest level in more than six months. The preliminary trade deal, due to be signed at the White House on Wednesday, marks a first step toward ending a tariff war that the world's two largest economies have been fighting since mid-2018.

China's yuan strengthened to a five-month high, gaining 0.3% to 6.901 a dollar. The yuan has gained roughly 2% since early December, when the preliminary deal was reached.

"As part of the deal, allowing some measure of appreciation in RMB is fine by them (China)," Vishnu Varathan, senior economist at Mizuho Bank, said. The yuan is considered a bellwether in the region and its gains were mirrored by other Asian currencies. The Malaysian ringgit appreciated 0.3%, while the Singapore dollar and the Indian rupee also firmed. Taiwan's dollar advanced up to 0.4% to a 19-month high after President Tsai Ing-wen won re-election by a landslide majority on Saturday.

Philippine financial markets were shut on Monday after a volcano near the capital spewed high volumes of ash. In offshore trade, the peso added 0.3% early in the session.

The Indonesia rupiah firmed as much as 0.6% to 13,670 per dollar, its strongest since February, 2018, as Bank Indonesia's (BI) deputy governor reaffirmed that the central bank won't intervene in currency markets so long as the rupiah's movements reflect economic fundamentals.

"Typically in a fairly low-yield environment where there is risk-on the rupiah tends to do very well," Mizuho's Varathan said. "BI has been fairly prudent in how they have managed the monetary policy and that is also adding to the tailwinds that we see in the rupiah."