Asia stocks and the Australian dollar bounced back on Wednesday from a two-day slide, with investors taking heart from data showing the U.S. economy slowly healing, and betting the swine flu outbreak will be contained.
The yen slid against higher-yielding currencies on improving risk appetite after data showing U.S. consumer confidence posting its biggest monthly jump in three years and the pace of home price declines slowing from a record pace.
The signs of gradual recovery in the struggling U.S. economy helped ease some of the worries about the impact of the swine flu, as well as reports that top U.S. banks will need to raise more capital after the government stress tests.
But investors were still on high alert over the risk of swine flu being declared a pandemic and the potential economic damage. A global hunt turned up new infectionsall around the world, with the number of confirmed cases in the United States rising to 66 and New Zealand and Israel added to the list of countries with confirmed cases.
Markets in Japan are closed for the Showa holiday. They will reopen Thursday. Japan's Nikkei 225 Average closed 2.6 percent lower Tuesday.
The U.S. dollar strengthened against the yen but was weaker against the euro while oil futures kept below $50 a barrel on worries the outbreak could hurt air travel and the world economy in general.
Seoul shares closed nearly 3 percent higher, led by techs and financials, helped by gains in U.S. futures and on hopes for positive comments from the U.S. Fed following its two-day interest rate meeting. Sentiment was also supported by South Korean central bank data showing the country posted a record high seasonally adjusted current account surplusof $6.64 billion in March, compared with a revised $4.09 billion surplus in February. Gains in technology issues including Hynix Semiconductor and LG Electronics.
Australian shares fell 0.4 percent as Australia and New Zealand Banking Group gave investors a reminder that tough economic times were not over by flagging more bad debt trouble ahead. More From CNBC.com
Hong Kong shares rebounded from their two-day selloff, rising 2.8 percent, but turnover on the exchange slowed as worries about a potential widespread swine flu outbreak kept investors at bay. Consumer goods exporter Li & Fung jumped 7.2 percent after the company said it expected to sign more outsourcing deals within months as cash-strapped retailers in the United States looked to cut costs in the economic downturn.
Singapore's Straits Times Index climbed 2.3 percent, with blue chips such as Capitaland leading the advance.
China's Shanghai Composite Index rose 2.8 percent, snapping a three-day decline with buying across a broad range of sectors from financials to autos to property.