Rebound continues

Wednesday saw gains in the majority of Asian stocks as they bounced back from heavy losses earlier in the week. The Japanese markets saw particularly strong gains in response to the Bank of Japan's positive remarks regarding interest rates.

Gains in other Asian markets, with the exception of South Korea and Japan, remained modest because sentiment was still unstable due to the possibility of a worldwide economic slowdown.

While Wall Street's robust overnight closing provided some good signals for regional markets, U.S. stock recovery remained shaky following Monday's brutal losses.

With gains of almost 3% each, the Nikkei 225 and TOPIX indices were the top performers in Asia on Wednesday. The two indexes have now recovered from Monday's debacle, which saw both of them fall to eight-month lows and into bear market territory, when combined with robust advances on Tuesday.

Following BOJ Deputy Governor Shinichi Uchida's statement that the central bank won't raise interest rates in an unstable market, Japanese stocks saw more gains.

His remarks gave rise to some hope that the bank's earlier estimate of a substantial increase in Japanese interest rates would not come to pass. The BOJ's surprise hawkish stance has been a major weight on Japanese markets. The BOJ hiked interest rates last week and signaled additional hikes this year.

As sentiment toward the country remained tense, mainland Chinese stocks underperformed their rivals, with the Shanghai Composite and Shenzhen CSI 300 indexes drifting in a flat-to-low range.

As worries about a sluggish recovery were raised by a string of dismal economic data, both indices were nearly at their lowest points in 2024. Lack of information about more stimulus plans from Beijing also caused traders to avoid Chinese markets.

This week's focus will be on additional national economic data, with trade and inflation figures scheduled to be released in the next several days.

Over in Europe and the US, the economic calendar is rather quiet for the day. However, the day will see earnings reports from the likes of Walt Disney, Shopify, McKesson, CVS Health, and Occidental for more cues on how different sectors have performed last quarter.

(Sources: investing.com, reuters.com)