Reports emerged in the U.S. overnight that China was moving to cut import tariffs on cars made in the U.S. from 40 percent to 15 percent — that news boosted auto stocks stateside and in Asia. News that Huawei's chief financial officer Meng Wanzhou was granted bail by Canada also added to the positive sentiment.
"On 12 December, there were two positive developments on trade. First: China will cut US automobile import tariffs. Second: Huawei's Meng got bail, which makes the ongoing trade talks between China and the US less complicated," Iris Pang, greater China economist at ING, wrote in a note.
Japanese stocks led gains in the region: The Nikkei 225 closed 2.15 percent higher at 21,602.75 points, while the Topix index ended the day 1.99 percent higher at 1,606.61 points.
Automakers were among the biggest gainers in Japan, following in the footsteps of their peers in the U.S. after reports emerged that China was moving to cut tariffs on cars. Yamaha Motor surged 4.18 percent, Mitsubishi Motor jumped 2.90 percent, while Toyota inched up 2.22 percent. Nissan, still reeling from a recent scandal involving former Chairman Carlos Ghosn, saw a more moderate gain of 0.95 percent.
Over in South Korea, stocks were also higher with the Kospi gaining 1.44 percent to 2,082.57 at Wednesday's close. Shares of major South Korean automakers also jumped: Hyundai Motor surged 6.28 percent and Kia Motors gained 3.03 percent.