Asian stocks advance following strong gains on Wall Street

Stocks in Asia gained ground during Wednesday afternoon trade, following an overnight rally on Wall Street.

Japan's Nikkei 225 jumped 1.82% in afternoon trade, with shares of index heavyweight Fanuc surging more than 2.5%. The Topix index also gained 1.94% as the sectors mostly advanced.

Over in South Korea, the Kospi rose 0.23% as chipmaker SK Hynix's shares advanced.

Mainland Chinese stocks rose by the afternoon, with the Shanghai composite gaining 0.63% and the Shenzhen component adding 0.39%. The Shenzhen composite also advanced 0.467%.

Hong Kong's Hang Seng index also rose 0.72%, as Hong Kong-listed shares of Chinese telecommunications equipment maker ZTE soared 5.94%.

Australia GDP

The ASX 200 in Australia also added 0.5% as majority of the sectors traded up.

Australia's economy grew less than expected in the first quarter, according to data on Wednesday. Gross domestic product grew 0.4% in the first three months ended March, slightly lower than a 0.5% increase that economists polled by Reuters predicted. The data came a day after the Reserve Bank of Australia cut its cash rate to a record low.

The Australian dollar changed hands at $0.6999, after touching an earlier low of $0.6985.

One strategist said it was "difficult to see it getting much better anytime soon."

"I think what today's report does do is it suggests that the RBA is probably going to have to cut its forecasts yet further," Robert Rennie, global head of market strategy at Westpac Bank, told CNBC's "Street Signs" on Wednesday. "And we're expecting a further two times 25 basis point rate cut from ... the RBA. One in August, one in November, and that's probably something that should continue to undermine the Australian dollar as we move through to the end of this year."

Asia-Pacific Market Indexes Chart

Wall Street rally

Overnight on Wall Street, stocks jumped as the major indexes all rose more than 2% each on the day. The Dow Jones Industrial Average surged 512.40 points, or 2.1% to 25,332.18. The S&P 500 jumped 2.1% to 2,803.27 and the Nasdaq Composite surged 2.7% to 7,527.12. The major indexes had their second-best day of 2019.

The moves stateside came after U.S. Federal Reserve Chairman Jerome Powell signaled that the central bank was open to easing monetary policy to support the economy.

He said the central bank will "act as appropriate to sustain the expansion." He noted, however, the Fed does not know "how or when" global trade issues will be resolved. "We are closely monitoring the implications of these developments for the U.S. economic outlook," he added.

Powell's comments came amid increasing expectations for a Fed rate cut. The CME FedWatch tool indicated about a 90% chance of a September rate cut. Expectations for a second rate cut in December were also above 80%.

The Fed chair's speech "hit the right balance appeasing equity markets by confirming the Fed stands ready to act in order to sustain the current economic expansion if trade tensions hamper US economic growth," while also rejecting "the recent aggressive pricing of Fed rate cut expectations," National Australia Bank senior foreign exchange strategist Rodrigo Catril wrote in a note.

"I think chairman Powell has given a message to markets that is indicating that a rate cut is coming. This is in essence a very strong signal that the (Federal Open Market Committee) is ready to actually talk about cutting rates," Sarah Bloom Raskin, a former governor at the Federal Reserve, told CNBC's "Squawk Box" on Wednesday.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.058 after climbing above 97.2 on Tuesday.

Investors also cheered comments made by the Chinese Commerce Ministry, which said in a post that the "differences and frictions between the two sides" should dealt with through talks, according to a Google translation. Market watchers took those remarks as a sign of possible easing of trade tensions between Beijing and Washington after each country hiked tariffs on billions of dollars worth of each other's goods in May.

But, the post also said talks "need to be based on mutual respect, equality and mutual benefit."

On the U.S.-Mexico trade front, Mexican Foreign Minister Marcelo Ebrard said Tuesday he expects both countries to find common ground on immigration and trade, despite U.S. President Donald Trump threatening to slap tariffs on all imports coming from Mexico. For their part, Republican lawmakers have indicated their opposition to the tariffs on Mexican goods. They have also hinted at blocking those levies if the president moves forward with them.

The Japanese yen traded at 108.07 against the dollar after touching levels around 107.9 in the previous session.

Oil prices declined in the afternoon of Asian trading hours, with international benchmark Brent crude futures slipping 0.48% to $61.67 per barrel, while U.S. crude futures fell 0.75% to $53.08 per barrel.

— Reuters and CNBC's Fred Imbert contributed to this report.

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