MSCI's broadest index of Asia-Pacific shares outside Japan rose by up to 0.3 percent to reach its highest level since early December.
China's official Purchasing Managers' Index increased to 50.3 in March from February's 50.2, in line with economists' forecasts. Above 50 indicates expansion, below 50 signifies contraction.
While the PMI figure alone is unlikely to dispel concerns of a slowdown in China, investor sentiment has improved on China in recent weeks as they expect Beijing will adopt a stimulus plan to achieve its growth target.
Shares were also supported after Fed chair Yellen reinforced the need for "extraordinary" commitment to support the U.S. economy, seemingly tempering expectations of a sooner-than-expected start to the rate-hike cycle.
Yellen gave a strong defence of the Fed's easy-money policies in her first public speech since becoming Fed chair two months ago, saying there remains "considerable" slack in the economy and job market.
"It seems like she expressed her own dovish ideas. There's nothing really new and the outlook of the Fed's policy has not changed that much but the markets like her remarks," Makoto Noji, senior strategist at SMBC Nikko Securities.
Emerging markets, which suffered a sharp selloff earlier this year on concerns about a turn in Fed policy, slowdown in China and political instability in some countries, appeared to have regained some stability.
MSCI emerging market index hit a three-month high on Monday, having outperformed S&P 500 since late March. Among them, Brazilian shares hit four-month high.
Rising risk appetite undermined low-return assets that had attracted safety bids last month at the height of the Ukrainian crisis.
Gold hit a seven-week low of $1,282.04 per ounce on Monday, despite Yellen's dovish comments while the yen also slipped to a three-week low against the dollar of 103.44 yen and a nine-month low against the risk-sensitive Australian dollar at 95.75.
The euro bounced back against the U.S. dollar to fetch $1.3773 even as softer-than-forecast inflation numbers put more pressure on the European Central Bank to act against the threat of deflation.
Euro zone inflation dropped to 0.5 percent in March, its lowest level since November 2009, having been in the ECB's "danger zone" of below 1 percent for six consecutive months.
However, not many market players expect the ECB to act at its policy meeting on Thursday, partly because of comments from ECB council member and Bundesbank President Jens Weidmann on Saturday.
Weidmann said that the euro zone is not in a deflationary cycle and that the ECB should not over-react to a slowdown in inflation caused largely by cyclical factors which should prove temporary.
Crude futures were off three-week highs following news Russia was withdrawing some troops on the Ukrainian border. U.S. crude futures stood at $101.41, off Friday's high of $102.24.