Japanese equities advanced at the open following Iran's refusal to engage with the U.S., as weekend talks between Tehran and Muscat failed to produce an agreement on reopening Straits of Hormuz.
The Nikkei 225 rose 298.4 points or 0.5% to 65,905.10 at the start of the session.
The breakdown in talks, triggered by Iran's revived set of conditions for Washington, signals that supply-side pressures on energy markets are unlikely to ease quickly. Brent crude climbed above $84 a barrel.
At home, Japan booked a current account deficit of 92.3 billion yen in June, swinging from a surplus of 3.968 trillion yen a month earlier, the Ministry of Finance said in a Monday release.
Elsewhere, focus is on the upcoming U.S. inflation data, with Friday's weaker-than-expected employment figures having already bolstered views that the Fed will hold rates steady for the time being.
Investors are weighing geopolitical risks against monetary policy expectations as trading gets underway.