Asian shares rebounded more than 1 per cent today following a global sell-off.
That sell-off came amid a recovery on Wall Street and a falling yen, which encouraged investors to seek bargains among exporters and other beaten-down stocks.
But caution prevailed, as market players tried to assess the risks of a crisis in the US mortgage sector spilling over into the wider economy and hitting demand for Asian goods.
European markets were expected to open sharply higher.
The Japanese currency extended gains against the dollar and euro as the rebound in stock prices soothed fears that investors may continue to dump riskier assets from their portfolios and pay off the cheap yen loans that had financed them.
Asian share indexes had dived yesterday - most by between 2 per cent and 3 per cent - after concern of rising defaults in US mortgage lending prompted the second big wave of selling in global equity markets in recent weeks.
Gold rose to track firmer oil prices as US crude extended yesterday's gains that had been made on the back of declining gasoline stockpiles in the United States.