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

TOKYO (Reuters) – Asian stocks rose modestly on Wednesday, supported by upbeat Wall Street earnings and hopes China's government spending would boost growth but trade tensions remained in focus ahead of a meeting between the U.S. and European Commission presidents.

With the trade spotlight now swinging to Europe, spreadsets expected the region 's stocks to open lower, with Britain' s FTSE .FTSE dipping 0.15 percent, Germany 's DAX .GDAXI losing 0.3 percent and France' s CAC .FCHI shedding 0.15 percent.

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 0.8 percent.

South Korea's KOSPI .KS11 lost 0.4 percent and Japan's Nikkei .N225 rose 0.4 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 a little changed at 94.568, having been reduced to 94.207 .

The 10-year Treasury note yield US10YT = RR eased to 2.937 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 was little changed at $ 1.1680 USD = while the dollar added 0.05 percent to 111.28 yen JPY =.

The pound was flat at $ 1.3141 GBP = D3, holding gains from the former day on news that 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 Turkish will read TRYTOM = D3 was on the defensive, having sunk more than 3 percent against the dollar on Tuesday after the country's central bank.

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 markets delivered a decisive verdict on Turkish financial assets, when the CPI and breaking reserves plummeting," wrote Sean Darby, chief global equity strategist at Jefferies.

"Until Real Reserves Rise for FX Reserves to Stabilize and Influence to Fall, Turkish Financial Assets Will Remain Under Pressure. We would like to see our global asset allocation. "

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

The Australian dollar fell 0.3 percent to $ 0.7396 AUD = D3 with its rally cut to show that local inflation remained stubbornly low last quarter. The Aussie had surged 0.5 percent on Tuesday for China's stimulus. [AUD/]

Brent crude futures LCOc1 were up 0.6 percent at $ 73.89 a barrel, adding to the previous day's gains as market focus shifted away from oversupply to the possibility of increasing Chinese demand. [O/R]

Copper on the London Metal Exchange (LME) traded at $ 6,267.50 per tonne CMCU3 after soaring 2.7 percent overnight to a two-week peak of $ 6,328.00 on Chinese stimulus hopes.

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