GLOBAL MARKETS-Asian stocks slip as virus' global impact puts markets on edge

* China rate cut done, market focus returns to virus spread
* Hong Kong, Korea stocks weaken
* Yen plunge boosts Nikkei
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Tom Westbrook
SINGAPORE, Feb 20 (Reuters) - Asian stocks eased and
currency markets were skittish on Thursday, as virus cases rose
in South Korea and Japan even as China added more stimulus via a
rate cut to support its economy.
China reported a large drop in new cases but that came
together with a jump in infections in South Korea, two apparent
deaths in Japan and researchers finding that the virus spreads
more easily than previously believed
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS fell 0.6%, led by falls of 0.8% on Hong Kong's
Hang Seng .HSI and South Korea's KOSPI .KS11 .
E-mini futures for the S&P 500 .SPX traded 0.2% softer
while bonds firmed slightly and the U.S dollar rose.
"I think there's a realisation that before we get all the
stimulus measures that people have been frothing about, you've
got to deal with a lot of companies that are finding themselves
with impairment charges or indeed solvency problems," said Sean
Darby, global equity strategist at Jefferies in Hong Kong.
"Markets have taken a step back because the authorities
won't do any major stimulus until they are completely sure the
virus has stopped, because there's no point in doing it when
people are sitting at home."
China cut its benchmark lending rate earlier on Thursday, as
anticipated, adding to a slew of measures in recent weeks aimed
at cushioning the virus' impact on the economy. That kept Chinese stocks supported, while Japan's Nikkei
.N225 advanced 1% as an overnight slide in the yen is a boon
for exporters, though the mood was more nervous elsewhere. .T
China had 394 new cases on Wednesday, the lowest since Jan.
23. More than 2,100 people have died from the coronavirus in
China, with eight deaths in other countries but not including
the two from the quarantined cruise ship in Japan.
South Korea's government reported 31 new cases of
coronavirus on Thursday, after a new outbreak traced to a
church, bringing the number of people infected in the country to
82.
In Japan, where the government has come under intense
criticism for its handling of an outbreak on a cruise ship
carrying about 3,700 people, broadcaster NHK reported that two
passengers in their 80s had died. TUMBLES
Currency markets were still reeling from an overnight plunge
in the Japanese yen, which fell even as safe-haven assets such
as gold climbed. FRX/
The yen was undermined by a run of weak data this week, but
traders were unnerved when it blew past a support level at
110.30 per dollar, broadening and accelerating its fall after
that.
It dropped nearly 1.4% against the dollar JPY= , its
sharpest fall in six months, and 2% against the Norwegian krone
- its sharpest daily drop in almost three years NOKJPY=R .
"Nearness to China and dependence on China have not helped
the yen as a risk-off. We have seen the yen and gold diverging
for a while and this may not be the end of it," said Shafali
Sachdev, head of FX in Asia at BNP Paribas Wealth Management.
"The kind of classic correlations between U.S. yields and
the yen, those have been kind of breaking down...we need to see
past this virus situation to see whether the yen will regain its
safe-haven status."
The skittish mood had investors punishing the Australian
dollar, sending it down 0.6% to an 11-year low of $0.6633 after
a surprise rise in unemployment. AUD/
Elsewhere, oil prices added to overnight gains while gold
loitered around $1,609 per ounce XAU= .
U.S. crude CLc1 last sat 25 cents firmer at $53.54 per
barrel and Brent added 16 cents to $59.28 LCOc1 .

(Editing by Shri Navaratnam and Jacqueline Wong)