The yen, whose slide to eight-year lows to the dollar on Tuesday contributed to a regional, then global, share sell-off, rebounded by around two yen in the morning amid growing caution over a possible intervention by the Bank of Japan.

Tokyo's Nikkei index closed only slightly down, and the region's other linchpin exchange, Hong Kong, ended the first session with small gains.

Malaysian stocks had clawed back some of Tuesday's heavy losses with a near three per cent rise by midday.

Dealers said the yen's rapid rise to as high as 145.40 to the dollar had helped balance the negative impact of big overnight falls on US and European markets, themselves prompted by worries over Asia's shaky economies.

But they said other regional markets were still anxious about the frail Japanese andChinese currencies, and had been hurt by the Dow's more than 100-point fall.

Manila stocks followed up Tuesday's near four per cent loss with a 4.8 per cent dive. Singapore, Korean and Chinese stocks were also on the ropes.

"Sentiment is negative because of the decline in the US market overnight, volatility in the peso and rise in domestic interest rates," said Fitzgerald Aclan, assistant vice-president at Orion Squire Capital Inc, explaining Manila's fall.

Asian shares and currencies tumbled across the board on Tuesday, spooked by fears that a weakening Japanese currency might prompt China to devalue its yuan and send regional currencies crashing.

The yen's rise partly soothed such nerves, but some analysts were sceptical whether it would last, given the weakness of the Japanese economy and perceived reluctance by the US to help Tokyo in any dollar-selling intervention.

Seoul shares refused to get excited about the yen's gains. The main index was down nearly two per cent at 305.35 in the afternoon,with traders citing lingering uncertainty over the Japanese currency.

Japan's vice finance minister for international affairs Eisuke Sakakibara told reporters on Tuesday there was no change in the Japanese government's policy of intervening in the foreign exchange market when deemed necessary.

The yen's abrupt rise after those remarks gave Tokyo and Hong Kong shares a much-needed breather.

"Investors are not keen to buy after prices rose higher earlier this morning, but there is also no excuse to sell heavily amid a strengthened yen," said Terry Cheung, sales director at Core Pacific-Yamaichi in Hong Kong.

The Nikkei index ended at 15,378.97, down just 0.18 per cent.

"The Dow's close off its low and the yen's recovery after Sakakibara comments kept the Nikkei average from diving sharply," said Masatoshi Sato, manager at Kankaku Securities.

Hong Kong stocks pared gains to trade slightly higher in the afternoon.

The Hang Seng Index edged up 9.35 points, or 0.14 per cent, to finish the morning at6,789.30 after swinging between 6,708.18 and 6,885.79 points.

Over the territory's border, hard currency B shares in Shenzhen took a beating as poor corporate results hit sentiment, traders said. Its main index ended the morning down four per cent, with Shanghai's equivalent bourse also losing over three per cent.

Manila's slump was led by a massive nine per cent fall in the market's property index following the central bank's sharp tightening of interest rates this week.

The main index fell 4.8 per cent to 1,307.30 points, but off the day's low of 1,263.03 points.

"Earlier in the session, people panicked...There was programmed selling on the foreign side because of the fall of the US market," said a senior trader of a foreign brokerage.

Malaysian markets took heart from a slightly firmer ringgit after the currency's recent weakness. But dealers remained doubtful whether the share index's rise was anything more than a technical rebound from Tuesday's plunge.

The composite index was up 9.13 points,or 2.73 per cent, at 343.83 at midday as the ringgit rose to 4.2150 per dollar from 4.2450 earlier.

Other south-east Asian markets were mixed, Singapore shares falling by around 1.50 per cent and stocks in Indonesia gaining slightly on the back of healthier blue-chip shares. Thai markets were closed for a holiday.

Taiwan stocks took a slight knock from Wall Street, ending down 0.44 per cent, while nervy Australian stocks gave up a similar amount.