Asian shares bounce after losses

But there were warnings that the surge could quickly run out of steam because of poor global fundamentals.

Tokyo jumped 2.01 percent, or 172.84 points, to 8,763.41 and Seoul soared 3.78 percent, or 66.75 points, to 1,833.46 while Hong Kong was 1.51 percent higher in the afternoon. Shanghai added 1.31 percent.

Shanghai also moved higher, adding 1.42 percent.

Sydney surged 2.65 percent, or 107.9 points, to 4,183.4. The index was given a boost by data showing the Australian economy rebounded strongly in the June quarter with 1.2 percent growth, beating expectations and reversing a contraction in the first three months of 2011.

The change in Tokyo's fortunes came after traders shut up shop on Tuesday having driven the market to its lowest point in more than two years.

Exporters were leading the upward charge after the yen weakened in the wake of an announcement by the Swiss central bank that it would fight to keep the franc's value down.

The move sparked speculation that the Japanese government might follow Switzerland's move and step in to crimp the stubbornly high yen, a persistent headache for companies trading overseas.

However, the Bank of Japan said later it would keep interest rates at a record low but did not unveil any new monetary easing measures, putting fresh upward pressure on the yen.

Major players such as Sony, Toshiba and Toyota Motor hit 2011 lows Tuesday.

But Takuya Yamada, senior portfolio manager at ITC Investment Partners, told Dow Jones Newswires the boost to exporters would likely not last.

"This yen-induced buy-back won't last, as the bigger issue surrounding the European debt crisis looms in the background," he said.

The greenback fetched 77.20 yen in Tokyo trade against 77.68 yen in New York late Tuesday, with the US unit's earlier strength from the Swiss move pared by the BoJ decision not to ease monetary policy.

The euro traded at $1.4062, up from $1.3992. The European common currency was at 108.57 yen compared with 108.70 yen.

"The currency market has calmed down in Asia," said Gen Kawabe, senior dealer at Chuo Mitsui Trust and Banking.

"There will be a lot of very burnt people overnight. Everyone is going to be licking their wounds," HiFX senior trader Stuart Ive said.

Kawabe added: "The yen weakened overnight but its rise is likely to be capped at levels above 78 yen per dollar on brisk demand from Japanese exporters to sell dollars at those levels."

The Swiss National Bank on Wednesday took markets by surprise when it announced a minimum exchange rate of 1.20 francs per euro, saying the current value of the franc was a threat to the economy.

It said it had "the utmost determination and is prepared to buy foreign currency in unlimited quantities," saying that the peg value was "still high" but that further measures could be taken if deflationary risks persisted.

The franc, which has surged by about 20 percent since 2009 as investors seek refuge from markets roiled by fears over the fragility of the European and US economies, dropped nearly 10 percent after the exchange rate was capped.

Stock markets in the United States and across much of Europe tumbled early on Tuesday because of the 17-nation eurozone's debt woes and a possible US slowdown, but later enjoyed a modest rebound.

On Wall Street, the Dow Jones Industrial Average, which lost more than two percent in the first minutes of trade, closed down 0.90 percent, or 100.96 points, at 11,139.30, its third straight trading day with triple-digit losses.

Investors were unsettled by anti-austerity protests in Italy and Spain and concerned by signs that Greece might fail to meet debt-cutting goals and that Germany may drop support for the latest Greece bailout plan.

Gold was well off the record high of $1,920.90 it hit Tuesday, trading around $1,837.50 an ounce at 0700 GMT.

Oil rose, with New York's main contract, West Texas Intermediate (WTI) light sweet crude for delivery in October, gained 37 cents to $86.39 per barrel.

Brent North Sea crude for October delivery added 37 cents to $113.26.

In other markets:

-- Taipei jumped 2.20 percent, or 161.82 points, to 7,529.01.

TSMC rose 3.78 percent to Tw$68.6 while Formosa Petrochemical was up 2.88 percent at Tw$82.2.

-- Manila rose 0.28 percent, or 12.13 points, to 4,315.21.

Lepanto Mining slumped 11.3 percent to 1.33 pesos, Ayala Corp was off 0.1 percent at 306 pesos and Philippine Long Distance Telephone was up 1.6 percent at 2,420 pesos.

-- Wellington rose 0.93 percent, or 30.39 points, to 3,300.95.

Telecom ended up 1.6 percent at NZ$2.48, while ANZ bank added 4.7 percent to NZ$25.60 and Westpac was 1.0 percent at NZ$25.10.

Copyright AFP (Agence France-Presse), 2011