HONG KONG, Aug. 18 - Asian stocks edged up from a three-week low on Wednesday, but gains were capped by ongoing fears about the Delta variant of the coronavirus that also caused the central bank to delay a previously expected rate hike.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.73%, snapping five consecutive sessions of decline but still traded just a little below year-to-date lows touched in July. The Nikkei rose 0.69% in Japan.
Investors are looking at the implications of spreading Delta variant and that's being felt in the slowing economic data, most of which has been surprising on the downside in the last two weeks, said Kerry Craig, global market strategist at JPMorgan Asset Management.
Chinese blue chips were among Wednesday's strongest gainers with firms in the lead but the risk-on mood was across the board with Hong Kong up 0.73% and Korea up 0.89%.
S&P 500 futures rose 0.08% and the European-wide Euro Stoxx 50 futures rose 0.23%, and FTSE futures rose 0.42% in early trades.
In earlier in the day, the Reserve Bank of New Zealand delayed a widely expected rise in interest rates as policymakers shifted gears after the country was put into a snap COVID 19 lockdown over a handful of new cases but still expects a hike before year-end.
The new Zealand dollar fell to a low of $0.6868 after the decision although it soon recovered, climbing back to $0.6933, as investors absorbed projections showing policymakers expect to raise rates over coming months.
They've said no go, because you have COVID and too much uncertainty. If it takes a few weeks, let the smoke clear then the tightening cycle is still on the table, said Imre Speizer, head of NZ strategy at Westpac.
Meanwhile, the euro weakened slightly in Asia after hitting a nine-month high against the dollar earlier this month.
Minutes of Federal Reserve Policy Meeting are scheduled later on Wednesday and analysts from CBA said the dollar could rise if these proposed members are considering announcing a gradual elimination of asset purchases in September.
Oil edged up in Asian hours after falling for four sessions on concerns about the rise of coronavirus cases.
U.S. crude rose 0.38% to $66.84 a barrel.
The yield on benchmark 10-year Treasury notes rose to 1.2767% compared with its U.S. close of 1.258% on Tuesday.