GLOBAL MARKETS-Asian stocks mostly higher as trade, virus treatment hopes lift mood

* MSCI AxJ gains 0.32%, close to 2-year peak
* Nikkei +1%, ASX 200 +0.7%
* Positive signs from U.S and China trade talks
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Tom Westbrook and Scott Murdoch
SINGAPORE/HONG KONG, Aug 25 (Reuters) - Asia's stock markets
were mostly higher on Tuesday as investors cheered signs of
progress in U.S.-China trade negotiations and following a fresh
Wall Street rally.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.32% to its highest since early January
and sits just a fraction below a two-year high.
Japan's Nikkei .N225 was trading 1.5% higher and banking
stocks led Australia's S&P/ASX 200 .AXJO up 0.58%.
The Hang Seng Index in Hong Kong .HSI was an outlier in
early trade, slipping 0.27% while the Shanghai Composite .SSEC
was 0.15% firmer.
Markets worldwide were boosted when U.S. regulators on
Sunday authorised the use of blood plasma from recovered
COVID-19 patients as a treatment option, helping the S&P 500
.SPX 1% higher to another record close overnight.
The positive tone across Asian markets on Tuesday follows
reports that top U.S and Chinese officials see progress being
made in resolving concerns around the Phase 1 trade deal reached
between the two countries in January. Ord Minnett investment advisor John Milroy said equities
market sentiment remained driven by elevated global liquidity
levels.
"The strong rebound in markets continues to be driven by the
large amounts of money governments and central banks keep
throwing at the system," Milroy said.
"There is no reason to expect markets to stop anytime soon
even in the face of reduced global activity levels. Investors
keep looking ahead with markets trading well above historical
price to earnings levels."
The U.S. Food and Drug Administration's move to allow the
blood plasma treatment was hailed by President Donald Trump.
Shares of AstraZeneca AZN.L also rose on a Financial Times
report that the U.S. government was considering fast-tracking
its experimental vaccine. That seemed to overshadow a rise in coronavirus cases in
Europe and the first documented case of human re-infection with
COVID-19, where a man in Hong Kong caught the virus again some
four months after first being infected. Also on Monday, top U.S. infections diseases expert Anthony
Fauci also told Reuters that rushing out vaccines could
undermine trials of other promising candidates.
In currency markets, the dollar, which has been sensitive to
sentiment in equity markets edged higher, defying pressure from
a gain in stocks that often leads investors to sell dollars for
riskier currencies. FRX/
Investors now await a Thursday speech from Federal Reserve
chairman Jerome Powell and expect he might address the future
approach to inflation and allow it to run hotter than 2% to make
up for years of undershooting.
The dollar also found support from an overnight rise in
yields, which extended by a whisker on Tuesday as the yield on
benchmark U.S. government 10-year debt US10YT=RR edged up to
0.6590%. That kept the euro EUR=EBS to $1.18 and the Aussie
AUD=D3 at $0.7179 in Asian morning trade.
In commodity markets, oil clung to overnight gains after
storms disrupted U.S. production. Brent crude futures LCOc1
firmed in early Asian trade to $45.21 a barrel and U.S. crude
CLc1 dipped to $42.55 a barrel.
The stronger dollar held gold XAU= to $1,933 an ounce. A
light data calendar in Asia has investors looking to Germany's
IFO business survey due at 0800 and U.S. consumer confidence
data at 1400 GMT.