Investing.com– Most Asian stocks rose on Wednesday as they recovered from steep losses earlier this week, while Japanese markets rose sharply following some encouraging comments on interest rates from the Bank of Japan.
Barring Japan and South Korea, gains in other Asian markets were still limited, as the prospect of a global economic slowdown still kept sentiment fragile.
Regional markets took some positive cues from a strong overnight close on Wall Street, although a recovery in U.S. stocks also remained tenuous after bruising losses on Monday.
Still, U.S. stock index futures reversed early losses and rose in Asian trade.
Japan’s Nikkei, TOPIX extend rebound rally
The Nikkei 225 and the TOPIX indexes were the best performers in Asia on Wednesday, rising more than 3% each. Coupled with strong gains on Tuesday, the two indexes had now reversed Monday’s rout, which saw both indexes tumble to eight-month lows and into bear market territory.
Extended gains in Japanese markets came after BOJ Deputy Governor Shinichi Uchida said the central bank won’t hike interest rates when markets were unstable.
His comments sparked some optimism that Japanese interest rates will not rise as sharply as initially forecast by the bank. The BOJ had raised interest rates last week and flagged more increases this year, with its unexpectedly hawkish turn serving as a key weight on Japanese markets.
The Japanese yen weakened sharply against the dollar, also benefiting local stocks.
Focus is also on key Japanese earnings on Wednesday, with SoftBank Group Corp. (TYO:9984) and Honda Motor Co Ltd (TYO:7267) set to report later in the day. The stocks were up 5.5% and 3.5%, respectively.
