Asian stocks set to follow US, Europe higher

Asian stocks appear set to follow the global rally, induced by China's move over the weekend to stimulate its cooling economy.

The People's Bank of China (PBoC) lowered the reserve requirement ratio (RRR) for all banks by 100 basis points on Sunday, marking the deepest single reduction since 2008 and the second industry-wide cut in two months. However, Asian markets failed to get a boost from the supportive measure on Monday as concerns of further crackdowns on speculative trading by Chinese authorities weighed on sentiment.

Trade in Japanese stock futures points to a higher open for the Nikkei 225. Chicago and Osaka futures traded at 19,720, respectively; both above the benchmark index's previous close of 19,634.

Australian shares could recoup Monday's losses after futures edged up 0.8 to 5,871, a 38-point premium to the underlying S&P ASX 200 index.

Overnight, U.S. stocks finished sharply higher on the back of unexpected stimulus from the world's second-biggest economy and as investors eyed corporate earnings. The tech-heavy Nasdaq led all major indexes, closing up 1.3 percent, posting its best day since February 10. The Dow Jones Industrial Average and S&P 500 settled 1.2 and 0.9 percent higher each.

Meanwhile, RBA governor Glenn Stevens said the central bank is willing to cut interest rates again if needed but is cautious about the impact on house prices and debt levels. In his speech in New York, Stevens also reiterated that the Australian dollar was "very likely" to fall further over time. The Australian dollar ended at $0.7726 against the U.S. dollar