Asian markets rebound fizzles

Japanese stocks rebounded from a 26-month low Thursday, ending a four-day losing streak, as investors snapped up shares of exporters such as Honda (NYSE:HMC), after the yen fell against the dollar, and as real estate companies clawed back significant losses.

The Nikkei jumped 2.1 per cent to close at 13,783.45, while the broader Topix rose 2.2 per cent to 1,330.44. Honda jumped 3.9 per cent to Y3,220, ending its losing streak. The stock this year had shed 11 per cent in value until Wednesday, while Toyota gained 3.1 per cent to close at Y5,470. Sony also rose 2.7 per cent to Y5,660. The yen recently traded at 107.87 after breaking into 105 territory yesterday, a 2½-year high.

Markets in the rest of Asia were mixed. Korea's Kospi closed up 1.1 per cent, while the Hang Seng did a u-turn, rallying 2.7 per cent after falling as much 2 per cent in earlier trading, the biggest rise since late November. Australia fell for the seventh-straight session, dragged down by miners affected by the initial fall in oil.

The MSCI Asia Pacific Index xxxx.

The Shanghai Composite Index was dragged down 2.6 per cent by financials to 5,151.626, following the Chinese central bank's decision late Wednesday to increase bank reserve requirements.

Investors are also still jittery across the region as there are still bank earnings to be announced in the US.

"We're now seeing markets trying to find some sort of sensible value-type level, so that's why you're seeing the prices bounce around," said Hugh Young, head of Aberdeen Asset Management Asia. "It's a bit like dropping a ball and watching the bounces die down until you get equilibrium."

Back in Tokyo, the market was also bolstered by a rebound in real estate stocks following a UBS report that said shares prices of Japanese real estate companies could "bounce back sharply" with the easing of subprime woes.

The Topix real estate index surged 5.7 per cent, while Mitsubishi Estate jumped 7 per cent to Y2,450.

Property companies in Hong Kong rebound after falling earlier in trading. Sun Hung Kai rose 2.1 per cent to HK$158 and Cheung Kong gained 0.2 per cent to HK$129.4

Japan's Nippon Paper shares shed 2.9 per cent to Y298,000 and the Topix paper and pulp index lost 1.9 per cent following a report that Nippon Paper's president may step down after the company was found to have fabricated the volume of recycled products used in its paper.

Taiwan shares were trading down nearly 1 per cent, a second day of declines, while shares in Mumbai fell in early trading, dropping 0.2 per cent to 4,144.82.