Japan leads Asia markets higher; Nintendo rallies after Saudi fund reportedly looks to raise stake

Asia-Pacific markets mostly climbed on Monday, led by Japan's Nikkei 225 rising almost 2% as investors look ahead to a week of central bank decisions from around the region.

The Nikkei climbed 1.8%, powered by financials and consumer cyclical stocks, and closed at 39,332.74. Mizuho Financial Group and Nikon were among top gainers on the index.

Separately, shares of video gaming company Nintendo climbed 4.4% on Monday, after Saudi Arabia's sovereign wealth fund was reported to be considering raising its stake in the company.

Kyodo also reported that the kingdom's Public Investment Fund is also considering acquiring more shares in Japanese video gaming companies. Currently, the PIF has stakes in Nintendo, Koei Tecmo Holdings as well as in game software developers such as Nexon and Capcom.

The yen strengthened 0.15% to trade at 148.46 after hitting its weakest level in over two months earlier in the session. The dollar gained after a strong U.S. jobs report on Friday, which also reduced expectations that the Federal Reserve would need another 50-basis-pont rate cut.

The yen has also been under pressure after new Japan Prime Minister Shigeru Ishiba said he doesn't "think the environment is ready for an additional rate hike" from the Bank of Japan.

Three central banks are set to release their interest rate decisions this week, namely the Bank of Korea, the Reserve Bank of New Zealand and the Reserve Bank of India.

Economists polled by Reuters expect the BOK and RBNZ to cut rates, while the RBI will hold.

The BOK on Friday is expected to lower its benchmark interest rate to 3.25% from 3.5%, while the RBNZ is expected to enact a 50-basis-point cut to 4.75% on Wednesday.

Back in August, the RBNZ surprised economists after it lowered its policy rate to 5.25% from 5.5%.

South Korea's Kospi reversed losses and rose 1.58% to 2,610.38, while the small-cap Kosdaq was up 1.56% and finished at 781.01.

Australia's S&P/ASX 200 rose 0.68% and closed at 8,205.4, with lithium stocks listed in Australia rallying after Rio Tinto expressed interest in acquiring U.S. lithium producer Arcadium. 

Liontown Resources rose 18.92%, Mineral Resources added 4.61%, while Pilbara Minerals and IGO traded around 1.64% and 2.65% higher, respectively. Arcadium Lithium's Australia-listed shares surged more than 45%.

However, Hong Kong Hang Seng index climbed 1.32% as of its final hour, while mainland China's markets remained closed for the Golden Week holiday and will return to trade on Tuesday. The HSI briefly passed the 23,000 mark on Monday and if it closes above that level it would be the first time since February 2022.

Over in the U.S, stocks advanced on Friday after a stronger-than-expected jobs report gave investors confidence around the health of the economy.

Data showed nonfarm payrolls grew by 254,000 jobs in September, far outpacing the forecasted gain of 150,000 from economists polled by Dow Jones. The unemployment rate ticked down to 4.1% despite expectations for it to hold steady at 4.2%.

The S&P 500 rose 0.9%, while the Nasdaq Composite jumped 1.22%. The Dow Jones Industrial Average added 0.81% to notch an all-time closing high of 42,352.75.

—CNBC's Lisa Kailai Han and Alex Harring contributed to this report.