SINGAPORE - Asian stocks rebounded on Wednesday, following a jump in US shares, after the Federal Reserve made an unprecedented pledge to keep interest rates near zero for at least two years, stemming a global equity rout for the time being.
But investors remained wary about the implication of the central bank's move -- that it expects the US economy to remain weak far longer than previously forecast -- and this supported demand for safe havens such as gold and the Swiss franc."Volatility is calming down from an extreme level. Clearly there's going to be considerable concerns still, but the market had gotten seriously carried away and gone to an extreme of fear," said Greg Gibbs, strategist at RBS in Sydney.
World stock markets had been tumbling since the start of August on fears of a slide back into recession for the United States, reinforced by a downgrade of the US credit rating on Friday, and the ever-expanding euro zone debt crisis.