TOKYO: Asian stocks on Monday moved further away from four-year lows struck last week, as a cold spell in parts of the northern hemisphere pushed oil prices higher and relieved some of the bearish pressure on global markets.
World equities also took heart from the European Central Bank last week signalling additional monetary easing steps to come, raising hopes that other central banks, like the Bank of Japan, would take the same path.
Spreadbetters forecast a higher open for Britain's FTSE, Germany's DAX and France's CAC against the positive backdrop for equities.
The dollar stood tall, notably against the safe-haven yen, as risk aversion eased slightly for now and pushed U.S. Treasury yields higher.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.5 percent, putting further distance between a four-year low plumbed last week.
Shanghai stocks added 1 percent and Tokyo's Nikkei, which slumped to a one-year low last week, rose 1.2 percent. Australian shares advanced 1.8 percent to a two-week peak.
"The latest rebound in oil, combined with European and Japan central bank's hinting at further stimulus, has provided a short-term reprieve for what so far this year, can be described as a nervous and punishing market," said Gary Huxtable, client adviser at Atlantic Pacific Securities.
On Friday, the S&P 500 rose 2 percent and the Dow added 1.3 percent Friday as a cold snap in North America and Europe caused a rally in oil prices. The S&P energy sector surged 4.3 percent.
Both the Federal Reserve and Bank of Japan hold policy meetings this week, with the Fed meeting on Jan. 26-27 and the BOJ gathering immediately after, on Jan. 28-29.
Investors will look for any hints of when the Fed intends to make a second interest rate hike, while there is speculation that the BOJ could opt to take additional easing measures.