TOKYO (Reuters) – Asian equities rebounded from a two-month low on Thursday, while the euro experienced a recovery after slipping to its lowest point after 10 months.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS stapled to 0 , 3 percent, which were the weakest since the beginning of April on Wednesday.
South Korea's KOSPI .KS1
The Dow .DJI rose 1.25 percent overnight and the S & P 500 .SPX gained 1.27 percent.
Global equities were badly hit, safe-haven yields fell sharply, and the euro plunged in the week after Italy's two anti-establishment parties postponed coalition-building plans and fears of a general referendum stoked Euro-membership of the country.
However, a degree of serenity returned as the two anti-establishment parties renewed their efforts to form a coalition government rather than force Italy to hold elections for the second time this year.
Italy's successful auction of five- and ten-year government bonds also raised concerns about its ability to self-finance after the turmoil in the debt market resulted in the biggest daily rise in two-year yields in 26 years.
"Financial markets have been able to assess and digest the situation in Italy in recent days, and now is the time for a little leniency from the turmoil," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
"The postponement will allow the market to re-focus on fundamentals, such as the US labor market report on Friday."
The Euro stood at 1.1669 EUR = after a rally of 1 percent the previous day. The currency fell to $ 1.1510 on Tuesday, its lowest level since the end of July 2017.
The dollar index against a basket of six major currencies .DXY lost 0.1 percent to 94.061, after rising to almost seven months on Tuesday had risen from 95.025.
The US currency was JPY = 108,730 yen after a low of 108,115 on Tuesday as risk aversion in broader markets increased investor demand for Japanese stocks, which are often sought in times of market turmoil.
The dollar received support as signs of easing political concerns in Italy raised US Treasury yields from the multi-week lows.
10-year US Treasury yields on US10YT = RR stood at 2.847 percent after dropping to 2.759 percent on Tuesday. This is the lowest level since April 11th.
The price of oil rose after a rally overnight, as the Russian central bank was careful to increase oil supply.
U.S. Crude futures CLc1 fell 0.2 percent to $ 68.07 a barrel after a gain of 2.2 percent on Wednesday. Prices fell to a six-week low of $ 65.80 a barrel on Tuesday as Saudi Arabia and Russia increased production.
Brent crude declined 0.25 percent to $ 77.31 a barrel, down 2.8 percent on Wednesday.
Reporting by Shinichi Saoshiro; Cultivation of Shri Navaratnam