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Italy's president appointed former European Commissioner Mario Monti on Sunday to head a new government, while in Greece Lucas Papademos, a former European Central Bank policymaker, has been sworn in as prime minister.

The new leaders have been charged with carrying out reforms and austerity measures to recover their country's credibility and prevent a wider financial meltdown in the euro zone.

Asian stocks, commodities, the euro gained while credit spreads tightened, suggesting a renewed appetite for risk.

However, there are still some lingering concerns with a 3 billion euro ($4.12 billion) sale of five-year debt by Italy later in the day, leading to some profit-booking in emerging Asian currencies.

"Uncertainties are still around. I doubt if the upbeat sentiment can be sustained for a whole week," said Frances Cheung, senior strategist for Credit Agricole CIB in Hong Kong, adding she would recommend selling risks including emerging Asian currencies on rallies.

"Moreover, front-end Asian rates may go down on expectations for some monetary policy easing, this is not supporting currencies either."

Last week, emerging Asian currencies fell on persistent worries about a euro zone bond market meltdown with Italian 10-year bond yield jumping above 7 percent, seen as unsustainable.

On Monday, the won rose on demand from exporters including shipbuilders on settlements.

Earlier, the South Korean currency gave up some gains as offshore funds and importers bought dollars on dips.

"Some players appeared to keep betting on Europe's disaster. But I expect the pair to gradually fall," said a senior foreign bank dealer in Seoul.

The Philippine peso slightly rose, while dollar-short covering weighed on the local currency.

The Singapore dollar dipped as investors took profits.

"I will still hold on to Asian currencies during these one or two days. But beyond I will look out for any negative news again and unwind long Asian temporarily. It will be a trading market and will look to buy back later," said a European bank dealer in Singapore.