* 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. 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. also plans to take over HNA Group and sell off its airline assets, Bloomberg reported on Wednesday, citing people familiar with the matter. 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)