WASHINGTON (Reuters) – Asian stocks were set to follow a late Wall Street surge on Tuesday, after the Federal Reserve’s fresh move to support financial markets through the coronavirus pandemic cheered investors.

Crude oil also rose, on signs of a recovery in fuel demand and news suggesting major oil producing nations would meet their commitments to cut output.

The Fed on Monday announced tweaks to its bond buying program, widening the range of eligible assets to include all U.S. corporate bonds that satisfied certain criteria.

This news came after the U.S. and other major central banks halted a steep plunge in equity markets in March through a host of fiscal and economic stimulus programs that helped restore investor confidence.

However, analysts warn markets are likely to be volatile as investors grow increasingly impatient over the pace of business re-opening from the coronavirus-induced lockdowns.

Australian S&P/ASX 200 futures were up 2.46%, while Japan’s Nikkei 225 futures rose 0.36% to be up 2.5% from the close of the underlying index on Monday.​

Hong Kong’s Hang Seng index futures rose 1.65%.

Fears of a second wave of COVID-19 infections had earlier rocked world markets, knocking down oil prices and major global equity indices.

MSCI’s gauge of stocks across the globe gained 0.03%.

Investors were spooked after China re-introduced restrictions in some areas after Beijing reported its biggest cluster of new infections since February. New cases and hospitalizations in record numbers also swept through more U.S. states.

Data showed factories in China stepped up production for a second straight month in May, giving investors hope, but also sustained contractions in retail sales and investment, suggesting many sectors were still struggling.

“We were able to shake off the early morning negative COVID-19 headlines from China,” said Joe Saluzzi, a partner at New Jersey-based brokerage firm, Themis Trading LLC.

“I think U.S. investors are keeping a close eye on the COVID-19 data, but it will take a more pronounced uptrend in positive cases for sellers to get more aggressive,” added Saluzzi.

The Japanese yen weakened 0.06% versus the greenback at 107.37 per dollar, while sterling last traded at $1.2615, up 0.10% on the day.

Crude oil swung into positive territory on improving demand and signs Organization of the Petroleum Exporting member states and allies were complying with a production cuts.

Prices rebounded after the energy minister of the United Arab Emirates voiced confidence that OPEC+ countries would meet their commitments.

U.S. crude recently rose 0.19% to $37.19 per barrel and Brent was at $39.89, up 3% on the day.

U.S. Treasury yields rebounded on the Fed announcement, as investors set aside concerns over the spread of the coronavirus that has boosted demand for safe-haven bonds.

Benchmark 10-year notes last fell 14/32 in price to yield 0.7462%, from 0.702% on Monday.

Euro zone yields edged down as investors bought safer assets such as government bonds.

Germany’s 10-year bond yield earlier was near a three-week lows at -0.45%.

The dollar index against a basket of currencies fell 0.6%.

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