A commentary published by PBOC last month said China needs to become the first nation to issue a digital currency in its push to internationalise the yuan and reduce its dependence on the global dollar payment system.
The broader Topix index was off 0.24% by the end of trading in Tokyo, closing its session at 1,643.35.
The offshore rate dropped as much as 0.7% against the greenback after the People's Bank of China said financial institutions will no longer need to set aside cash when purchasing foreign exchange for clients through currency forwards, effective Monday.
In Australia, the S&P/ASX 200 advanced 0.49% to 6,132.00, while across the Tasman Sea, New Zealand's S&P/NZX 50 managed gains of 0.62% to settle at 12,356.89.
Amid such compounding narratives, the Trump Administration had called on the US Congress on Sunday in order to pass a downsized pandemic relief bill, which was developed by capitalizing on a surplus of an expired small-loan business.
Chinese stocks were also boosted by rising chances of Joe Biden's victory in the USA presidential election - an administration seen less likely to incline toward tariffs and trade disputes.
China recently announced a new focus on an economic strategy dubbed "dual circulation", which would rely more on internal demand to buffer against worldwide tensions, especially with the U.S.
European stocks and US stock futures rose 0.5%.
China aspires to be a leader on digital currencies.
However, Saturday's move from the PBOC to cut forward reserve requirements, making it cheaper to short the yuan or to hedge against a rise, hints further gains could be tempered.
"Overall, this means they are definitely trying to give a signal that they may be dissatisfied with the current pace of appreciation", said Rohit Garg, director of Bank of America Merrill Lynch.
In a report released by AsiaOne, it was stated that the digital currency test conducted by China could have the potential to eliminate the role of the USA dollar as the dominant global currency.
Technology conglomerate SoftBank Group was up 2.64%, while among the benchmark's other major components, automation specialist Fanuc was down 1.79% and fashion firm Fast Retailing was 0.1% weaker. The kiwi dipped 0.1% with the softer yuan to sit at $0.6661.
In commodity markets, oil prices were back under pressure after a ten-day oilworkers strike in Norway was resolved late last week, likely boosting production.
USA markets are also gearing up for the earnings season.
Gold held steep Friday gains at $1,930 an ounce as investors stuck with bets that US stimulus would drive inflation to the benefit of bullion.
- Tech Tent: Giants under the cosh from Congress
- The Best PS4 Bargains From Amazon Prime Day
- COVID-19 Survives on Surfaces For 28 Days - Study Finds
- Barrett to Tell Senators That Making Policy Is Not Role of Court
- USA lawmakers slam Big Tech 'monopolies'
- Ontario confirms 809 new COVID cases today
- This is Apple’s Diwali ‘gift’ to iPhone 11 buyers in India
- OnePlus Releases Oxygen 11
- Tech giants abuse their power
- Azerbaijan and Armenia report shelling of cities despite truce