The yen eased against the dollar and euro as traders moved out of the safe-haven currency in the wake of the optimistic news while strong US consumer spending data also provided support.
Tokyo closed the day 0.26 percent, or 26.31 points, higher at 10,109.87 as a softer yen cushioned results of the closely watched Tankan survey, which showed confidence among major manufacturers remained weak.
Seoul gained 0.76 percent, or 15.25 points, to 2,029.29 and Sydney slipped 0.14 percent, or 5.9 points, to 4,329.3.
Hong Kong fell 0.40 percent in the afternoon, while Shanghai was closed for a public holiday.
China said Sunday that manufacturing activity last month hit its highest level since March last year, tempering recent concerns of a sharp slowdown in the world’s number two economy.
The official purchasing managers index (PMI) rose to 53.1 from 51 in February, helped by an increase in new orders, the China Federation of Logistics and Purchasing said. The figure marks the fourth straight rise.
A reading above 50 indicates expansion, while a reading below 50 suggests contraction.
The “Chinese PMI should ensure risk appetite starts the quarter on the front foot,” said Mike Jones, currency strategist at Wellington-based BNZ.
“The data should help dispel lingering fears of a Chinese hard landing,” he added, according to Dow Jones Newswires.
However a separate survey by HSBC showed a less optimistic picture than the official figure.
HSBC’s PMI fell to 48.3 in March from 49.6 in February, marking the fifth month manufacturing activity has remained in contraction, the bank said in a statement.
On Friday eurozone finance ministers meeting in Copenhagen agreed to boost their firewall against another debt crisis to about 800 billion euros ($1.1 trillion).
The deal will comprise 500 billion euros from the permanent European Stability Mechanism bailout fund that comes into effect in July, plus 200 billion euros in loans already pledged, and 100 billion euros in bilateral loans and EU funds.
The deal lifted the euro late Friday and the unit extended its gains Monday.
In afternoon Asian trade it bought $1.3340, against $1.3336 late Friday in New York, while it was also at 110.80 yen from 110.55 yen in New York.
The dollar rose to 83.06 yen from 82.85 yen.
Investors sold the yen after the Bank of Japan’s quarterly Tankan survey showed business confidence unchanged at minus four in March, disappointing the market.
Economists had expected a reading of minus one as the yen has recently started to ease after the central bank carried out surprise monetary easing in February.
In Washington on Friday the Commerce Department said consumer spending, the main driver of the economy, surged 0.8 percent in February, following a 0.4 percent rise in January,
The Dow gained 0.50 percent and the S&P 500 added 0.37 percent but the Nasdaq slipped 0.12 percent.
On oil markets New York’s main contract, West Texas Intermediate crude for delivery in May, gained 20 cents to $103.22 per barrel while Brent North Sea crude for May settlement was up 32 cents at $123.20.
Gold was at $1,668.30 an ounce at 0610 GMT, compared with $1,663.90 late Friday.
In other markets:
— Taipei fell 0.88 percent, or 70.10 points, to 7,862.90.
Hon Hai Precision lost 3.06 percent at Tw$111.0 while leading smartphone maker HTC was 1.68 percent lower at Tw$587.0.
— Wellington slipped 0.48 percent, or 19.93 points, to 3,492.62.
Fletcher Building shed 1.6 percent to NZ$6.63, Auckland Airport fell 1.0 percent to NZ$2.44 and Contact Energy ended 1.69 percent lower at NZ$4.56.