Asia-Pacific equities rallied on Monday as investors were cheered by the US government’s decision to take control of Freddie Mac and Fannie Mae, alleviating growing concerns about the health of the mortgage giants.

Financial stocks were some of the main beneficiaries of the news, with Japanese banks enjoying double digit gains in their share prices. Bonds dropped and the dollar gained Y1 against the Japanese currency from Friday, recently trading at Y108.83.