On Monday, global stocks remained at record highs, while US bond rates flirted with three-month lows, as investors anticipated the Federal Reserve to continue to its dovish stance later this week.

The Nikkei in Japan jumped 0.35%, while MSCI's broadest index of Asia-Pacific equities outside Japan fell 0.1% The region's main markets - China, Hong Kong, and Australia - were shut down for a holiday, limiting activity.

Global equity markets were reveling in the possibility of a broader economic rebound from the coronavirus epidemic, and the expectation that the United States Federal Reserve would maintain its dovish monetary policy.

On Friday, the MSCI all-country world stock index, the S&P 500 in the United States, and the pan-regional STOXX Europe 600 index all set new highs.

The rise occurred even though US inflation data released on Thursday surpassed market forecasts.

"One significant issue is that the Fed has stated that inflation would be temporary and that it would retain its loose monetary policy," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "However, another point to consider would be that the markets are just flooded with liquidity."

Abundant funds are flowing into bonds, where the 10-year U.S. Treasury yield was at 1.465 % ahead of the Fed's policy meeting in the week, after falling to a three-month low of 1.428% on Friday.

"I predict the 10-year yield will decrease to 1.25% or maybe 1%", said Akira Takei, fund manager at Asset Management One, stressing that the U.S. economic recovery is expected to stagnate in the coming months.

"Before the epidemic, the unemployment rate in the US was 61%. It has rebounded to 58% but I anticipate it to slow down. This has never returned to pre-crisis levels following the Great Financial Crisis of 2008."

Speculators are also increasing their long bets in US debt, with net long positions in US bond futures reaching their biggest level since October 2017, according to US financial watchdog statistics.

Many investors anticipate the Fed to maintain its dovish stance during its two-day meeting beginning Tuesday.

Although some Fed board members have stated that the bank should begin considering decreasing its bond purchases, most investors believe that the majority of policymakers would rather want to wait a little longer.

"The Fed is unlikely to surprise us this week," said Fujito of Mitsubishi UFJ. "However, there's also a definite risk that the Fed's stimulus may become enormous in the long run." When property markets are so hot, there is no necessity to acquire mortgage bonds."

The euro has lost pace in the currency market after the European Central Bank indicated little readiness to remove its support last week.

The euro was trading at $1.2111, down from a one-month low of $1.2093 on Friday. The yen was unchanged at 109.70 yen.

The British pound traded at $1.4113, towards the lower end of its trading range over the last month, ahead of British Prime Minister Boris Johnson's pronouncement on Monday as to whether the country's planned easing of coronavirus prohibitions can take place on June 21 as planned.

Data revealed a significant spike in cases of the quickly spreading Delta strain, which was detected initially in India, putting hopes of lifting the restrictions in jeopardy.

Johnson, according to the British newspaper The Sun, is planning to postpone the release of the lockdown until July 19.

Meanwhile, oil prices remained at multi-year highs, responding to an improving forecast for global fuel demand. Brent oil futures rose 0.2% to $72.85 a barrel, close to their highs since May 2019.

West Texas Intermediate (WTI) oil futures in the US rose 0.2% to $71.05 a barrel, approaching their best since October 2018.