* China expected to cut lending rate to combat virus
* Asian stocks advance
* Yen nurses losses after overnight plunge
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Tom Westbrook
SINGAPORE, Feb 20 (Reuters) - Asian stocks edged up on
Thursday, supported by a fall in coronavirus cases and
expectations of more Chinese stimulus to offset the economic
impact of the epidemic, while the Japanese yen nursed heavy
losses after suffering its steepest drop in six months.
The epicentre of the outbreak in China's Hubei reported just
349 new cases on Thursday, the lowest since Jan. 25, although it
was accompanied by a change in diagnosis rules. China is widely expected to cut its benchmark lending rate
on Thursday, adding to a slew of fiscal and monetary measures in
recent weeks aimed at cushioning the virus' impact on the
economy. China also plans to take over HNA Group and sell off its
airline assets, Bloomberg reported on Wednesday, citing people
familiar with the matter. MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS ticked up 0.1%.
Buoyed by the cheaper yen, Japan's Nikkei .N225 rallied
1.5%. Markets in Australia and New Zealand minted record highs
.AXJO .NZ50 .
"The lowering of interest rates, cutting of corporate tax
rates, increasing money supply...these are all seen as very
strong responses" from China, said Michael McCarthy, chief
market strategist at CMC Markets in Sydney.
The prospect of central bank support and easier money also
underpinned bonds, with U.S. Treasury yields steady, with
benchmark 10-year yields last at 1.5815% US10YT=RR . US/
Overnight pan-regional STOXX 600 index .STOXX in Europe
rose 0.8% to a record high. The Dow Jones .DJI , S&P 500 .SPX
and Nasdaq .IXIC all gained. .EU .N
More than 2,100 people have died from the coronavirus in
China, spreading to more than two dozen countries, and
governments around the world are trying to prevent it from
becoming a global pandemic.
YEN TUMBLES
The most dramatic move overnight was a steep drop in the
Japanese yen, which posted its sharpest fall against the dollar
in half a year, even as safe-haven assets such as gold traded
firmer.
Selling was broad and sustained through the session.
The yen fell nearly 1.4% against the dollar JPY= and the
kiwi NZDJPY=R and almost 2% against the Norwegian krone - its
sharpest daily drop against the krone in almost three years
NOKJPY=R .
"It is rare to see USD/JPY and gold ripping at the same
time, but the simple explanation is that the world is awash in a
flood of money and there are not many attractive places to park
that excess liquidity," said Brent Donnelly, Spot FX Trader at
HSBC.
The yen recouped some of those losses in morning trade, to
rise 0.2% to 111.17 per dollar. FRX/
Elsewhere oil prices held overnight gains, while gold gave
some of its rise back.
U.S. crude CLc1 last sat 30 cents firmer at $53.60 per
barrel and Brent settled at $59.12 LCOc1 . Gold last traded at
$1,609.33 per ounce XAU= .
(Editing by Shri Navaratnam)