Japan stocks set to rise after Merck announces new Covid treatment; China markets closed

SINGAPORE — Shares in Japan looked set for a positive start after Merck announced its new Covid oral antiviral treatment that reduces the risk of hospitalization or death.

The Nikkei futures contract in Chicago was at 29,190 while its counterpart in Osaka was at 29,050. That compared against the Nikkei 225's last close at 28,771.07.

Australian stocks jumped in early trading, with the S&P/ASX 200 up 1.55%.

Merck and Ridgeback Biotherapeutics announced Friday they've developed a drug which reduces the risk of hospitalization or death by around 50% in Covid patients. If authorized by regulatory bodies, the drug could be the first oral antiviral medicine for Covid.

The companies plan to seek emergency authorization for the antiviral Covid treatment after the medicine showed "compelling results" in clinical trials.

Markets in China are closed for most of this week for holidays and are set to reopen on Friday.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 93.956 after a recent decline from above 94.4.

 The Japanese yen traded at 110.96 per dollar, stronger than levels around 112 seen against the greenback last week. The Australian dollar changed hands at $0.7279 following a bounce late last week from around $0.72.

 – CNBC's Chloe Taylor contributed to this report.