Asian markets rebound after sell-off

HONG KONG (AFP) - Asian markets rebounded on Friday after the previous day's huge sell-off, with dealers picking up bargains in Tokyo, helped by a Wall Street rally and upbeat US data.

The dollar slipped after enjoying a bright start, however, which in turn pared early gains for Japan's Nikkei index, with fears over a possible end to central bank monetary easing continuing to drag on sentiment.

Tokyo climbed by 1.94 per cent, or 241.14 points, to 12,686.52 after slumping by 6.35 per cent on Thursday. However, it was well down from the 3.57 per cent surge early in the morning.

Sydney jumped by 2.05 per cent, or 96.0 points, to close at 4,791.8, Seoul put on 0.35 per cent, or 6.51 points, to 1,889.24. Hong Kong rose by 0.39 per cent, or 82.10 to 20,969.14.

Chinese stocks closed up 0.64 per cent, or 13.68 points, at 2,162.04. The index fell nearly 3 per cent on Thursday as dealers returned from a three-day holiday to another batch of weak domestic economic data.

Markets were sent tumbling on Thursday as investors fret about the end of the huge bond-buying put in place by the US Federal Reserve in September and which in turn fuelled a surge in global stock markets.

That has raised concerns about Japan's own massive stimulus unveiled in April as part of a spending splurge by Prime Minister Shinzo Abe - dubbed "Abenomics" - aimed at boosting the economy.

But Mr David Herro, CIO of international equities at Harris Associates, told Dow Jones Newswires: "Through all of the recent market volatility, the fundamentals of Abenomics remain in place, and just need time to play out."

Bargain hunting was supported on Friday by figures showing US claims for unemployment insurance benefits fell in the first week of June, pointing to a continued but slow recovery in the jobs market.

The government also said retail sales rose by 0.6 per cent in May from April, beating expectations and driven by a surge in autos.

"Car sales and retail sales in general are decent, suggesting consumers are recovering from the pain of higher taxes," said Mr Chris Low of FTN Financial.

On Wall Street the Dow climbed by 1.21 per cent, the S&P 500 was up 1.48 per cent and the Nasdaq added 1.32 per cent.

The dollar benefited from the news and rose in New York on Thursday to 95.31 yen, from 94.64 earlier in the day in Tokyo.

However, there remains questions over whether the upbeat US results can be sustained and what it means for the Fed stimulus programme, with upbeat data suggesting the economy can grow without the support.

And on Friday afternoon, the greenback stood at 94.98 yen.

In other forex trade, the euro bought US$1.3337 compared with US$1.3372 in New York while it was also at 126.64 yen from 127.48 yen.

Oil prices were mixed, with New York's main contract, light sweet crude for delivery in July, rising five cents to US$96.74 a barrel and Brent North Sea crude for August delivery shedding three cents to US$104.92.

Gold was at US$1,385.46 at 0640 GMT from US$1,385.70 late on Thursday.

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