According to SocGen-Crosby Equities strategist Sriyan Pietersz, the markets' gains would likely be short-lived, as fundamental local and regional economic factors remained unchanged.

``The rally may only be short-lived with all regional markets still facing considerable economic problems.'' said another analyst. ``Nothing much has improved and the market was rebounding after last week's huge sell-off. The plunging yen had triggered panic selling in the region as investors feared another round of currency devaluations in the Asian region would force China to devalue the yuan. In Hong Kong, the property sector is showing continued weakness and there is still tight liquidity in the banking sector,'' said Eugene Law, director at LippoSecurities.

Meanwhile Moody's Investors Service on Thursday cut its subordinated debt rating for Japan's second largest credit bank, Long Term Credit Bank of Japan Ltd, from Ba1 to the speculative B1 grade citing `deteriorating financial fundamentals'. It is also reviewing the bank's main ratings for a possible cut. However, Prime Minister Ryutaro Hashimoto on Thursday vowed `drastic' action to resolve huge bad loans in the financial sector to save Japan's and Asia's economies.

The concerted dollar-selling soothed rising fears in Asia that the yen's precipitous fall could pressure China to devalue the yuan and provoke a fresh round of currency devaluations. Following the joint intervention Asian and European bourses have staged major recoveries. Japan's Nikkei index climbed 4.4 per cent, Hong Kong's Hang Seng index surged 6.4 per cent, Thailand's broad-based index rocketed 8.1 per cent, Singapore index surged 2.3 per cent, Shanghai's B shares advanced 4.8 per cent and Malyasian stock market up 4.6 percent.

Elsewhere, South Korean share prices soared 8 per cent in the first 40 minutes of trade,, Indonesia rose 2.7 per cent in the morning and Taiwan advanced 4.0 per cent by the close. Wall Street's Dow Jones index of leading shares rose 1.9 per cent, London's Footsie climbed 1.8 per cent, Germany's DAX 30 advanced 2.1 per cent and Paris's CAC 40 in dex was up 2 per cent. The bullish mood was bolstered by a global regrouping to stave off the threat of Asia plunging again into a financial turmoil. Tokyo is to host a meeting Saturday of the G-7 deputy finance ministers, with Washington represented by US Deputy Treasury Secretary Larry Summers, and 11 other Asian nations including China.

The US-Japan intervention, which brought the yen back to around 136 to the dollar from its eight-year low Tuesday of 146.75 yen, eased fears of a calamitous Chinese devaluation, said Barlays Capital economist Susumu Kato.Japanese share prices soared 4.4 per cent Thursday, after the yen's strong rally against the dollartriggered buying across-the-board, brokers said. The Nikkei stock average of 225 selected issues on the Tokyo Stock Exchange rose 646.16 points to finish at 15,361.54.

Malaysia's key stock index ended 4.6 per cent higher Thursday due to the yen's recovery although some quick profit-taking pared earlier gains. The Kuala Lumpur Stock Exchange's 100-share weighted composite index rose 20.94 points to close at 471.82 while the lesser second board index climbed 1.1 per cent, or 1.15 points, to 104.70.

Thai share prices surged 8.1 per cent Thursday. Thai stocks closed off their highs after the yen's rebound eased pressure on the Chinese yuan, sending the index soaring briefly through the 300 points barrier for the first time in more than a week.

Hong Kong stocks closed up 6.4 per cent. The Hang Seng Index ended up 511.62 points at 8,515.97 on heavy turnover of US$ 1.3 billion. The market jumped nearly 8 per cent in morning trading, before some profit taking emerged in the afternoon.

Singapore share pricesclosed 2.3 per cent higher but off their highs. The Straits Times Industrials index rose 25.71 points to 1,133.41, off an intra-day rise by 62.52 points, while the broader index rose 9.90 points to 309.70.