SHANGHAI—While the yuan is expected to see mainly symbolic gains against the U.S. dollar Monday, China's stock and bond markets will likely rally in reaction to Beijing's pledge Saturday to increase the currency's flexibility after nearly two years of keeping it pegged against the dollar.

With China's latest move clearly aimed at easing international criticism of its rigid currency policy ahead of the Group of 20 summit in Toronto this coming weekend, a guiding of the yuan higher as early as Monday from its de-facto peg at...