Asian markets picked up Monday where they left off last week, with gains across the board as investors tracked a healthy lead from Wall Street.

The advances helped take another bite out of the big losses suffered at the start of February, sparked by concerns at the impact of rising inflation that could lead to higher US interest rates.

Those worries were eased somewhat Friday when the Federal Reserve, in its semi-annual report to Congress, said inflation remains subdued globally and it expects to raise borrowing costs three times this year — tempering speculation of four increases.

However, analysts warn that equity valuations remain elevated and volatility could still return.

Monday's positive start kicks off a busy week, with the release of key US data including economic growth, jobs creation and wages.

Also, new Fed boss Jerome Powell will speak before a key finance committee. Markets will pore over his comments for clues about plans for monetary policy — though many predict he will stick to the path of his predecessor Janet Yellen.

Powell “looks like he is on track to keep the Yellen strategy — so gradual rate rises this year”, Stephen Halmarick, head of global markets research at the Commonwealth Bank of Australia, told Bloomberg TV.

All three main Wall Street indexes powered higher Friday, with the Dow up 1.4 percent, S&P 500 up 1.6 percent and NASDAQ 1.8 percent up.

Oil prices rise

Those gains filtered through to Asia. Tokyo ended 1.2 percent higher, Hong Kong added 0.7 percent in the afternoon and Sydney closed 0.7 percent higher. Shanghai rose more than one percent, Singapore put on 0.5 percent and Seoul was 0.2 percent higher.

Wellington and Taipei also climbed, though Manila and Jakarta slipped.

The dollar eased after climbing Friday on the back of the Fed comments, with the yen and pound rallying. However, the euro's gains are being curbed by uncertainty ahead of weekend elections in Italy, one of the eurozone's biggest economies.

High-yielding units were also sharply up.

Oil prices rose following a surprise drop in US stockpiles and as a key terminal in major producer Libya suffered disruption from protests. But gains were tempered by comments from Saudi Arabia's oil minister that an output cap by OPEC and Russia could be eased next year.

“Investors are likely looking at Libya for a potential reason for a rally in oil prices, but this shouldn't last too long,” said Barnabas Gan, an economist at Oversea-Chinese Banking Corp.

“Global oil fundamentals have been improving ever since OPEC and its allies agreed for production cuts, and the demand story is still supporting prices.”

Key figures around 0610 GMT –

Tokyo – Nikkei 225: UP 1.2 percent at 22,153.63 (close)

Hong Kong – Hang Seng: UP 0.7 percent at 31,469.75

Shanghai – Composite: UP 1.1 percent at 3,326.00

Euro/dollar: UP at $1.2326 from $1.2296 at 2130 GMT

Pound/dollar: UP at $1.4017 from $1.3968

Dollar/yen: DOWN at 106.53 yen from 106.83 yen

Oil – West Texas Intermediate: UP 24 cents at $63.79 per barrel

Oil – Brent North Sea: UP 14 cents at $67.45 per barrel

New York – DOW: UP 1.4 percent at 25,309.99 (close)

London – FTSE 100: DOWN 0.1 percent at 7,244.41 (close)