Japan's Nikkei jumps 2% as Asia markets pop following strong rally on Wall Street

SINGAPORE — Shares in the Asia-Pacific jumped Wednesday after a sharp bounce in U.S. stocks overnight.

The Nikkei 225 in Japan rose 2.09% and the Topix index gained 1.81%.

Japanese automaker Toyota said its production in August would be around 700,000 units, lower than the previously announced figure of 850,000 units, due to a parts shortage related to Covid disruptions.

South Korea's Kospi advanced 1.51% and the Kosdaq was 1.44% higher.

In Australia, the S&P/ASX 200 rose 0.47%.

Reserve Bank of Australia Governor Philip Lowe on Wednesday said inflation for the June quarter to be released next week will show a further step-up, and there needs to be a path back to 2% to 3% inflation.

Prices rose 5.1% in the March quarter. In his speech, Lowe also said the neutral nominal rate is at least 2.5%, whereas current rates are at 1.35%.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.39%.

U.S. stocks rallied Tuesday stateside following strong earnings reports.

The Dow Jones Industrial Average popped 754.44 points, or 2.43%, to 31,827.05. The S&P 500 jumped 2.76% to 3,936.69 and the Nasdaq Composite rose 3.11% to 11,713.15.

China is expected to keep its benchmark lending rate unchanged Wednesday.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 106.680, after falling sharply.

The Japanese yen traded at 138.16 per dollar, stronger than the levels seen last week. The Australian dollar was at $0.6893, strengthening from earlier this week.

Bitcoin continued to gain ground, sitting above $23,000 at $23,411.53 at 7.53 p.m. ET Tuesday.

U.S. crude futures were flat at $104.22 per barrel, while Brent crude fell 0.43% to $106.89 per barrel. Both benchmarks settled 1% higher in the previous session.