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Asian markets recover, Tokyo rebounds

Hong Kong - Asian markets recovered on Friday after heavy falls a day earlier, with Tokyo surging back from its worst one-day drop since the March 2011 quake-tsunami disaster as investors moved to recoup losses.

Markets moved back up after falling Thursday on signs the US Federal Reserve could scale back massive stimulus measures and after weak Chinese factory data.

Tokyo, which fell more than seven percent the previous session, had bounced back 2.65% by the break.

Seoul was up 0.13%, Shanghai rose 0.43% and Hong Kong climbed 0.12%.

Sydney was down 1.36%.

US stocks ended slightly lower on Thursday, with the Dow Jones Industrial Average falling 0.08%, or 12.67 points, to 15,294.50.

But European markets took a heavier hit, with most indices, including London, Frankfurt and Paris, dropping more than two percent, following the Asian lead.

Kenji Shiomura, strategist at Daiwa Securities, said Thursday's frenzied selling in Tokyo was a temporary correction to recent sharp advances.

"There has not been any grave event that could change corporate earnings outlooks and what happened yesterday should be a correction to the recent excessive rises," he said.

"Looking ahead, the market will likely be on an uptrend on expectations of a recovery in company earnings."

Prime Minister Shinzo Abe's pro-spending, pro-growth policies have weakened the yen more than 20% against the dollar over the past six months helping to boost share prices nearly 60%.

But some analysts had warned a correction was overdue.

The "slump is not necessarily the end of the bull market in Japanese equities, but the next few months will be much harder going", London-based Capital Economics said in a note.

The fall was triggered after Fed chief Ben Bernanke indicated a possible start to tapering of stimulus measures in the US and HSBC's preliminary purchasing manager's index showed manufacturing activity in China contracted in May for the first time in seven months.

Japanese stocks were supported by a weaker yen, with the dollar at ¥102.22 compared to ¥101.82 late on Thursday in New York.

The euro was at ¥132.13 from ¥131.72 and $1.2921 from $1.2935.

Oil closed little changed in New York on Thursday from sharper losses in Asia, with New York's main contract, West Texas Intermediate light sweet crude for July edging down three cents to $94.25 a barrel and Brent North Sea crude down 16 cents at $102.44. There was no trading in Singapore on Friday.

Markets were also closed in Bangkok and Kuala Lumpur.

Gold was at $1 394.26 at 02:50 GMT Friday from $1 388.57 late on Thursday.


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