TOKYO -- Asian stocks steadied on Wednesday on hopes of additional Chinese stimulus to lessen the economic impact of a coronavirus outbreak, but risks remain as the illness continues to spread and the death toll neared 500.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3 percent. Australian shares were up 0.58 percent, while Japan's Nikkei stock index rose 1.19 percent.
The safe-haven yen and Swiss franc nursed losses versus the dollar while the yuan held on to gains in offshore trade in a tentative sign of improvement in risk appetite as investors monitor the impact of the virus.
Oil prices, however, remained weak on worries about a long-term dent in demand for energy and other commodities despite hopes for more output cuts from OPEC and its allies.
China and other countries have imposed travel restrictions to try to contain a new virus that emerged in the central Chinese city of Wuhan late last year, slamming the breaks on manufacturing and tourism in the world's second-largest economy.
Many investors argue that any slowdown will be temporary and that Chinese policy steps are reason to remain optimistic about the growth outlook, but so far public health officials have not found a way to stop the spread of the virus both inside and outside of China.
"We're going to have a strong day in Asia, but whether this is the reversal of a downtrend remains to be seen," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
"Oil investors remain pessimistic about demand disruptions, but equity investors, especially overseas, are discounting the impact of the virus."
US stock futures fell 0.18 percent in Asia on Wednesday. The S&P 500 rose 1.5 percent on Tuesday and the tech-heavy Nasdaq rose to a record high.
The People's Bank of China (PBOC) is likely to lower its key lending rate - the loan prime rate - on Feb. 20, and cut banks' reserve requirement ratios in the coming weeks, policy sources told Reuters.
The PBOC has already pumped hundreds of billions of dollars into the financial system this week. This helped Chinese stocks stabilize on Tuesday following a rout that wiped out around $700 billion in market capitalization on Monday when Chinese markets opened after an extended holiday.
The virus has already claimed nearly 500 lives. Japan's health minister said on Wednesday 10 people on a cruise ship at the port of Yokohama have tested positive for the new virus.
In the currency market, the yen traded at 109.46 per dollar, close to the lowest in almost a week. The Swiss franc held steady at 0.9635 versus the dollar following a 0.3 percent decline on Tuesday.
In the offshore market, the yuan traded at 6.9898 per dollar after rising on Tuesday for the first time in five trading sessions.
Benchmark 10-year Treasury yields extended gains in Asia, rising to 1.6043 percent in another sign of receding concern about the coronavirus.
US crude ticked up 0.12 percent to $49.67 a barrel in Asia but remained below the psychologically important $50 a barrel mark.
US oil futures have lost 14.8 percent since China confirmed on Jan. 21 that human-to-human infection of the previously unknown virus is possible, which kicked of a rout in global markets as the number of cases and the death toll rose.