Stocks in Japan and Australia bounced higher Wednesday and the yen steadied as investors edged away from safety plays on hopes that a salvaged Wall Street rescue plan in Washington could keep global equities rallying.
U.S. political drama over a $700 billion plan for the government to buy illiquid securities has whipsawed markets, but expectations that Congress will pass something soon drove a 5.3 percent rally in the S&P 500 stocks index overnight, erasing more than half of Monday's market plunge.
Volumes were thin as many markets in Asia are closed for national holidays.
The U.S. dollar was steady against the yen at 105.85 yen, and the euro was up 0.2 percent to 149.90. The dollar briefly touched a 4-month low against the yen on Tuesday, but later surged across the board on a combination of U.S. investors bringing money back home from overseas investments. Crude oil futures gained about $1 to trade above $101 a barrel in the Asian session.
The Nikkei 225 Average closed up 1 percent, with Nomura Holdings and other financials leading the market higher, reflecting moves on Wall Street. But longer-term worries about both the global and domestic economies were preventing extensive rises, with investors inhibited by a Bank of Japan quarterly "tankan" survey showing Japanese business sentiment turning negative for the first time in five years.
Seoul shares finished 0.6 percent down. Banking issues including Hana Financial Group gained. This was offset by some blue chip issues, which traded lower on persistent caution in the markets, as investors remained anxious about the outlook for the economy. Samsung Electronics and LG Electronics both declined.
Australian shares rose 4.2 percent, as miners BHP Billiton and Rio Tinto gained after the Australia's regulator cleared BHP's bid for Rio. BHP added 5.6 percent while Rio jumped 12.4 percent.
The Singapore, Indonesian and Malaysia markets are closed for the Eid holidays. The Chinese and Hong Kong markets are closed for the National Day holidays. Hong Kong will reopen Thursday while China will reopen next Monday.