Asian shares bounce

SINGAPORE (Reuters) -- Asian shares bounced on Thursday following hefty falls the previous session, while the yen hovered near a three-month high against the dollar, and oil steadied after falling $2 from a record high.

A last-minute rally for U.S. stocks saw investors snap up beaten down shares after a near 4 percent fall for Asian stock markets the previous day, although concerns remain there will be more bad news from credit markets.

MSCI's measure of Asia Pacific stocks excluding Japan rose 1.3 percent after a 0.7 percent gain overnight for the S&P 500 but remains nearly 8 percent off a record high hit on July 24.

"The U.S. market rally has probably given the market a bit of confidence and sectors that were most adversely affected yesterday will probably see a bounce back," said Simon Doyle, head of strategy at Schroder Investment Management.

Shares in Macquarie Bank -- whose warning of losses at two of its U.S. investment funds acted as one of the triggers of Wednesday's falls -- rose 2 percent, recovering from a drop of more than 10 percent.

Japan's Nikkei 225 rose 0.5 percent, with gains for high-tech exporters such as Canon Inc. offset by falls for bank shares on worries that they will sustain damage from the credit market crunch.

"The rise is still likely limited within a rebound, as the New York market seems still unstable, and foreigners continue placing net sell orders of Japanese stocks," said Zenshiro Mizuno, senior managing director at Marusan Securities.

Other Asian stock markets did even better, with Korea's KOSPI up 1.3 percent and Australia's S&P/ASX 200 rising 1.9 percent after suffering its biggest daily fall in nearly six years on Wednesday.

The yen was steady from late U.S. trade at 118.81 to the dollar, about 1 yen off a three-month high hit on Wednesday as investors unwound risky carry trades.

Volatility also extended into resources, with U.S. crude oil down $2 from a record high of $78.77 a barrel hit the previous day.

The market had initially focused on a 6.5 million barrel build in U.S. crude stocks, much wider than expected. But 11-month high refinery output eased worries about possible shortages of fuel for cars and heating in the world's largest oil consumer.

Japanese government bonds slipped from the previous day's two-month high as stock markets recovered, with dealers also selling ahead of a 1.9 trillion yen ($16 billion) 10-year auction due later in the session. JGB futures were down 0.25 percent at 133.17.

Volatility remains a key factor, with the Chicago Board of Trade's volatility index hitting its highest in four years on Wednesday, while spreads on high-yield Asian corporate debt over U.S. Treasuries have doubled in the past month.

A key question investors are asking is whether the market turmoil and record energy prices will derail global economic growth, something which the International Monetary Fund at least thinks is unlikely.

"The latest market volatility has not substantially changed our outlook on the global economy," the IMF's First Deputy Managing Director John Lipsky said on the sidelines of an APEC finance ministers conference.

The IMF's global growth forecast stood at 5.2 percent for both 2007 and for 2008, although Lipsky did say that economic risks were for slower rather than faster growth. E-mail to a friend

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