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Asian shares higher on modest rebound in Japan

TOKYO--Shares held steady Wednesday as wary investors took heart from modest recoveries from sell-offs the day before, but there wasn't much bounce to the rebound.

European shares looked set for a slow start, weighed down by worries over corporate earnings. Britain's FTSE 100 edged up 0.1 percent to 6454.10 and the CAC-40 in France barely budged at 4118.53. Germany's DAX fell 0.2 percent to 9,106.65.

The outlook for U.S. markets was wobbly, with Dow futures up 0.1 percent and S&P 500 futures down 0.03 percent.

Although markets stabilized after a 4.2-percent plunge in Japan's benchmark Nikkei 225 index to a four-month low, investors remain cautious, said Kwong Man Bun, chief operating officer at KGI Securities in Hong Kong.

“Rebound momentum is not significant,” said Kwong. “Market sentiment remains cautious without a sustainable rebound, it's just a technical rebound after the heavy sell-off, but funding interest is limited.”

Investors await U.S. jobs data due Friday and a policy meeting Thursday of the European Central Bank, which is under pressure to ease policy further to counter deflation.

“The capital markets are really in a watch-this-space mode right now,” Chris Weston, chief market strategist for IG in Melbourne, Australia, wrote in a commentary Wednesday.

A key source of uncertainty is mainland China, whose markets remain closed for the Lunar New Year holiday until last Friday.

Asian markets were mixed on Wednesday, with a rally on Wall Street giving Tokyo the impetus to claw back some of its losses in the previous session.

However the dollar slipped against the yen as investors remain on edge about the global economy, following a series of disappointing economic data and the Federal Reserve's decision to reduce its stimulus program.

Tokyo's Nikkei rose 1.23 percent or 171.91 points to 14,180.38.

Seoul rose 0.24 percent, or 4.47 points, to 1,891.32 but Sydney lost 0.53 percent, or 26.8 points, to close at 5,070.3. Hong Kong fell 0.60 percent, or 128.39 points, to 21,269.38 as it reversed initial gains.

Shanghai was closed for a public holiday.

Markets around the world have been sent into a tailspin in recent days following worse than expected manufacturing activity data from China and the United States, suggesting softness in the global economy.

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