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Japan Rebounds to Close Up But Australia Slips

Japan ended higher Thursday, rebounding from early losses, but Australia closed lower, hitting a five-day low as investors remained sidelined after recent signs that the U.S. economy is headed into recession.

Most Asian markets are closed for the Lunar New Year holiday Thursday and Friday. Markets in Hong Kong, Indonesia, Malaysia, Singapore, South Korea and Taiwan will all reopen Monday. The Chinese market will reopen Wednesday.

Supply problems in South Africa kept platinum prices near their record of $1,819 an ounce earlier this week, but oil dipped below $87 a barrel to near their lowest since last October on signs of weaker demand in the United States, the world's top consumer.

Japan's benchmark Nikkei 225 Average closed 0.8 percent higher, rebounding from earlier losses, buoyed by Softbank after Deutsche Securities initiated coverage of the stock with a "buy" rating, but some exporters were hurt by growing U.S. recession fears. The upside was also limited as a series of reduced earnings forecasts by Japanese companies put a lid on gains.

The dollar held steady against the yen, and was supported versus the euro at around $1.4625 ahead of a policy announcement by the European Central Bank later on Thursday.

The ECB is widely expected to hold interest rates at 4 percent, and investor focus is likely to be on whether the ECB would keep its vigilance on inflation risks even as signs show that economic growth in the region may be slowing.