Optimism Returns to Asian Markets Amid Volatile Trading

Asian share markets showed signs of recovery after a turbulent week, with hopes that the worst might be behind them. Japanese stocks experienced minor dips compared to earlier drops. Investors are looking forward to potential buying by the GPIF, amidst stabilizing yen carry trade and shifts in global financial sentiments.

Asian share markets showed signs of recovery on Wednesday, bouncing back after Wall Street's reassessment of U.S. recession concerns. Meanwhile, Japanese stocks saw a slight decline due to heightened volatility.

The Nikkei's 0.6% drop was modest compared to earlier significant dives. Analysts from JPMorgan suggested that the sell-off in Japanese stocks might be nearing its end, as both nonresident and individual investors have adjusted their net buying year-to-date.

There's optimism that the GPIF, a major market force, could become a net buyer by September's end, adding stability to the market. The stabilization of the yen carry trade, a major factor in the recent market rout, also contributed to this positive sentiment. The dollar's slight rise against the yen and Swiss franc further illustrated investor confidence. MSCI's broad Asia-Pacific index, excluding Japan, gained 0.4%, and Korean stocks rose by 0.8%.

With safe-haven demand decreasing, U.S. Treasury yields increased for the second session. Economic data suggest solid growth, with the Atlanta Fed's GDPNow estimate pointing to a 2.9% annual growth rate. In commodities, gold prices remained stable, while oil prices fluctuated due to conflicting global demand and supply concerns.

(With inputs from agencies.)