Wall Street extended its seemingly relentless advance, fuelled by the US central bank's dovish pivot last week, and while investors in Asia were a little more reticent at first, they turned more upbeat as the day progressed.
Since the Fed released its "dot plot" forecast for rates, officials have in recent days lined up to temper market predictions that it will slash borrowing costs by up to 1.5 percentage points through 2024.
In a Wall Street Journal interview published Monday, San Francisco Fed chief Mary Daly said she thought policy was in a "good place" to bring inflation down to the bank's two percent target.
Her Cleveland counterpart Loretta Mester told the Financial Times in another interview published Monday that traders had run ahead of themselves.
"They jumped to the end part (of the Fed's post-meeting statement), which is 'We're going to normalise quickly', and I don't see that," she said.
And Chicago chief Austan Goolsbee said he was confused by the strong market reaction.
The comments come after New York Fed chief John Williams told CNBC that "we aren't really talking about rate cuts", adding it was "just premature to be even thinking about" a March reduction, which some experts have suggested.
Stephen Innes at SPI Asset Management said: "It is essential to recognise that the Fed will likely demand sustained improvement in inflation metrics over several months before implementing any rate cuts.
"This consideration supports the notion that the actual pivot in rates might not occur as rapidly as currently anticipated by the market."
- No change by BoJ -
Shanghai, Sydney, Singapore, Mumbai, Bangkok, Wellington, Manila and Jakarta edged up but Hong Kong and Taipei fell. London and Frankfurt rose at the open, while Paris was flat.
Tokyo jumped more than one percent and the yen sank against the dollar after the Bank of Japan opted to stand pat on monetary policy, as expected, and provided no guidance on its plans for the new year.
Speculation had been swirling in recent days that the BoJ was close to shifting away from its long-running, ultra-loose monetary policy as inflation picks up.
It kept its short-term interest rate at -0.1 percent and maintained its yield curve control, which keeps a tight rein on bond yields.
Before the decision, Belita Ong, of Dalton Investments, told Bloomberg News that officials would most likely "take a slow course".
"It's taken all this time and this amount of depreciation and declining interest rates to get the economy going again and to get some inflation as opposed to disinflation back in the economy.
"So it's hard for me to believe that the BoJ would do something abrupt."
Economists have forecast the bank to make an announcement in April, Bloomberg reported.
Oil prices ticked down a day after piling on more than one percent in reaction to a number of firms saying they would avoid the Red Sea following attacks on several cargo ships by Yemen's Iran-backed Huthi rebels.
The rebels have escalated attacks on tankers, cargo ships and other vessels in the Red Sea, imperilling a transit route that carries up to 12 percent of global trade.
The group said Monday it had fired on two "Israeli-linked" vessels in a bid to pressure the country over its war in the Gaza Strip.
Five of the world's six largest shipping companies have announced they will not send ships through the Red Sea due to the threats.
In corporate news, Nippon Steel lost almost three percent in Tokyo after saying Monday it would buy US Steel for $14.1 billion, creating the world's second-largest steel company.
- Key figures around 0810 GMT -
Tokyo - Nikkei 225: UP 1.4 percent at 33,219.39 (close)
Hong Kong - Hang Seng Index: DOWN 0.8 percent at 16,505.00 (close)
Shanghai - Composite: UP 0.1 percent at 2,932.39 (close)
London - FTSE 100: UP 0.1 percent at 7,623.16
Dollar/yen: UP at 144.10 yen from 142.73 yen on Monday
Euro/dollar: DOWN at $1.0911 from $1.0919
Pound/dollar: UP at $1.2657 from $1.2650
Euro/pound: UP at 86.36 pence from 86.31 pence
West Texas Intermediate: DOWN 0.3 percent at $72.23 per barrel
Brent North Sea crude: FLAT at $77.94 per barrel
New York - Dow: FLAT at 37,306.02 (close)
dan/sco
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