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Asia – Pacific Stocks Add Gains as Hopes for a Coronavirus Vaccine Rise

Stocks in Asia mostly traded higher Wednesday morning as hopes for a coronavirus vaccine rise.

In Japan, the Nikkei 225 gained 1.33% in morning trade while the Topix index added 1.32%. South Korea’s Kospi jumped 0.97%.

Hong Kong’s Hang Seng index also advanced 0.77%. Mainland Chinese stocks, however, slipped. The Shanghai composite was down 0.54% while the Shenzhen component shed 0.693%.

Over in Australia, the S&P/ASX 200 advanced 1.23%. Overall, the MSCI Asia ex-Japan index traded 0.78% higher.

Bank Julius Baer’s Bhaskar Laxminarayan said Asia’s markets are “taking the cues from the global environment.”

“Equities in general … is the only game in town,” Laxminarayan, who is Asia chief investment officer at the firm, told journalists on Wednesday. “Chances of making any kind of return on a risk-adjusted basis really rests on the shoulders of equities now.”

Investors on Wednesday watched for reaction to the latest developments surrounding a potential vaccine for the coronavirus. Biotech firm Moderna’s potential vaccine to prevent Covid-19 produced a “robust” immune response, or neutralizing antibodies, in all 45 patients in its early stage human trial, according to newly released data published in the peer-reviewed New England Journal of Medicine.

Still, tensions between Washington and Beijing could weigh on investor sentiment. U.S. President Donald Trump on Tuesday said he signed legislation to impose sanctions on China in response to its interference with Hong Kong’s autonomy. Trump also said he signed an executive order ending Hong Kong’s special status with the U.S.

Meanwhile, the Bank of Japan is poised to release its outlook report at around 11:00 a.m. HK/SIN on Wednesday.

“The Bank of Japan is expected to leave monetary policy unchanged today,” Joseph Capurso, head of international economics at Commonwealth Bank of Australia, wrote in a note.

“Monetary policy settings in Japan were already extremely easy prior to the coronavirus pandemic,” Capurso said. “Looser monetary policy is unlikely to make much difference to Japan’s recovery in our view.”

Overnight stateside, the Dow Jones Industrial Average closed 556.79 points higher, or 2.1%, at 26,642.59. The S&P 500 finished its trading day 1.3% higher at 3,197.52 while the Nasdaq Composite closed nearly 1% higher at 10,488.58.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 96.104 after touching an earlier low of 96.06.

The Japanese yen traded at 107.22 per dollar after touching levels around 107.4 against the greenback yesterday. The Australian dollar changed hands at $0.7008 after rising from levels below $0.694 yesterday.

Oil prices edged higher in the morning of Asian trading hours, with international benchmark Brent crude futures up 0.4% to $43.07 per barrel. U.S. crude futures also gained 0.42% to $40.46 per barrel.