SINGAPORE/NEW YORK (Reuters) – Asian stocks rose to a fresh seven-week high on Thursday, lifted by encouraging early results from a COVID-19 treatment trial, though bonds and currencies held cautious ranges ahead of a European Central Bank meeting later in the day.

FILE PHOTO: People wearing protective face masks, following an outbreak of the coronavirus, are reflected on a screen showing Nikkei index, outside a brokerage in Tokyo, Japan February 28, 2020. REUTERS/Athit Perawongmetha

Anthony Fauci, the top U.S. infectious disease official, said Gilead’s (GILD.O) antiviral remdesivir will become the standard of care for COVID-19 after early results from a trial seemed to show it helped speed recovery.

The news rallied Wall Street on Wednesday and lifted MSCI’s broadest index of Asia-Pacific shares, excluding Japan .MIAPJ0000PUS, by 0.8% to its highest since mid-March.

Japan’s Nikkei .N225, returning from a holiday on Wednesday, jumped 2.5% to a seven-week high as well, catching up on the week’s gains. More caution was evident in other asset classes, with the U.S. dollar firm and U.S. futures steady.

“Any positive medical development is helpful,” said Westpac FX analyst Sean Callow.

“But no-one should be counting on a major breakthrough – the key for markets is control of the spread of the virus,” he said, another front where there are positive signs.

“I think it is reasonable for markets to be less bearish than they were in mid-March…but it’s far too early for a sustained rally in risk appetite, so we’re probably due for a little bit of a pullback.”

Futures for Wall Street’s S&P 500 ESc1 handed back early gains to turn flat and the dollar held its own against the risk-sensitive Antipodean currencies – rising for the first time in a week against the Aussie and kiwi.

The yield on benchmark U.S. 10-year Treasuries US10YT=RR stayed parked at 0.6237%, after the U.S. Federal Reserve left interest rates near zero and gave no indication of lifting them any time soon.

Australia’s ASX 200 rose 1.4%. The Shanghai Composite .SSEC rose 1%. Markets in Hong Kong and South Korea were closed for public holidays.

OF MONEY AND MEDICINE

Markets have been excited by the prospect of a COVID-19 treatment because it may help countries emerge from lockdowns – even though investors’ hopes don’t seem to take into account regulatory and distribution difficulties should a treatment be found.

Another focus has been the enormous fiscal and monetary policy efforts from world governments and central banks to staunch the economic damage from the pandemic.

That has the ECB under increasing pressure to deliver even more support on Thursday – probably by expanding its bond buying programme – as European leaders seem unable to agree on the details of a rescue package.

“The tone has been set for the ECB to ‘do whatever it takes’ via its bond purchase programmes in terms of size, composition and maturity,” strategists at Singapore’s DBS Bank said in a note.

A press conference following the ECB meeting is due at 1330 GMT.

The euro EUR= was stuck at $1.08640 on Thursday, near the top of a range where it has been pegged for two weeks, but drifted lower as the dollar broadly firmed.

The greenback scraped off multi-week lows against the Antipodean currencies and last sat at $0.6537 per Aussie AUD=D3 and $0.6122 per kiwi NZD=D3.

Elsewhere there was encouraging news from South Korea, which on Thursday reported no new domestic coronavirus cases for the first time since its Feb. 29 peak.

However, comments from U.S. President Donald Trump accusing China of seeking to defeat his re-election bid in November gave cause for renewed caution.

Gold XAU= was steady at $1,711.31 per ounce.

Brent crude LCOc1 and U.S. crude CLc1 futures each rose more than 6% amid optimism that a storage squeeze is not as bad as first feared, and that demand for fuel may soon return.

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