Asia stocks track Wall Street gains, U.S.-EU meet keeps trade in focus

TOKYO (Reuters) – Asian stocks were higher on Wednesday, with strong Wall Street earnings and hopes China's government spending would boost growth but trade tensions remain in focus ahead of a meeting between the U.S. and European Commission presidents.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.2 percent.

The index extended the previous day's gains made after China said it will adopt a more vigorous fiscal policy to cushion the impact of external uncertainties.

The Shanghai Composite Index .SSEC was little changed after one-month high blow-drying. It has advanced roughly 3 percent so far this week. Hong Kong's Hang Seng .HSI climbed 0.6 percent.

South Korea's KOSPI .KS11 lost 0.15 percent and Japan's Nikkei .N225 pink 0.5 percent.

Overnight on Wall Street, the S & P 500 .SPX closed at its highest level since Feb. 1 as Alphabet's ( GOOGL.O ) [.N]

"Gains by U.S. shares are providing support for equities, as China's stimulus plan. "These earnings will continue to come out and these will be key points for the markets," said Soichiro Monji, senior economist at Daiwa SB Investments in Tokyo.

On the trade front, focus was on talks between U.S. President Donald Trump and European Commission President Jean-Claude Juncker set later on Wednesday, at which trade issues are likely to dominate.

In foreign exchange markets, the dollar index against a basket of six major currencies .DXY was little changed at 94.568, with 94.207.

The 10-year Treasury note yield US10YT = RR stood at 2.943 percent after climbing to a six-week peak of 2.973 percent overnight.

The yield shot up this week on the speculation of the Bank of Japan on the subject of monetary policy.

The euro edged up 0.05 percent to $ 1.1688 USD = while the dollar added 0.05 percent to 111.26 JPY yen =.

The pound was up 0.05 percent at $ 1.3151 GBP = D3, building on gains from the previous day on which British Prime Minister Theresa May would lead negotiations on the country's departure from the European Union.

The decline in China's yuan is estimated at $ 6.797 CNY = CFXS. It pulled back from a 13-month low of 6.829 set the previous day on expectations which would be allowed to loosen further.

The Australian dollar dipped 0.1 percent to $ 0.7411 AUD = D3 after gaining 0.5 percent on China's stimulus lifted the currency.

The Turkish will read TRYTOM = D3 was on the defensive after the country's central bank on Tuesday.

The central bank's decision was in focus amid investors' concerns over its perceived lack of independence from Turkish President Tayyip Erdogan. The president is seen wanting lower borrowing costs to fuel economic growth, while the central bank is tasked with combating inflationary pressure.

The South African ZAR = D3, on the other hand, China would invest $ 14.7 billion in the local economy.

Copper on the London Metal Exchange (LME) traded at $ 6,270.50 per ton CMCU3 after soaring 2.7 percent overnight to a two-week peak of $ 6,328.00.

Iron ore on the Dalian Commodity Exchange DCIOcv1 touched a two-month peak of 479.5 yuan a ton.

Brent crude futures LCOc1 were up 0.67 percent at $ 73.92 a barrel, adding to the previous day's earnings as market shifted away from oversupply to the possibility of increasing Chinese demand [O/R]