Asian stock markets have rallied after key central banks stepped in to tackle the global credit crisis.
Asian stock markets rallied a day after central banks stepped in to tackle the global credit crisis, but fears over deeper underlying problems remained.
In Japan, share prices were up by 2.7% in morning trading after five central banks said they would inject billions of dollars into the credit markets.
Japan's Nikkei and broader Topix both ended 1.6% up, having added 3% at one point after central banks put billions of dollars into the credit markets.
There were similar rises in Singapore, Hong Kong, South Korea and Australia.
Shares in Australia, Singapore and India climbed more than 2%. South Korea and Hong Kong were up by more than 1%.
US and European share prices had closed higher on Tuesday after the move by banks including the US Federal Reserve and the European Central Bank.
But some Japanese analysts say the bank moves will not solve the credit crisis.
The cash injection is aimed at easing the credit crunch and its impact on the wider economy, by making it easier for businesses and consumers to borrow money.
"Yesterday's move was like a shot in the arm for the market, but it hasn't gotten at the real root of the illness," said Norihito Fujito, a strategist at Mitsubishi UFJ Securities.
The emergency action should provide a temporary respite for markets that have been in turmoil over the credit squeeze and growing evidence of recession in the US, analysts say.
Rising costs
'Positive'
The cash injection on Tuesday was aimed at easing the credit crunch and its impact on the wider economy, by making it easier for businesses and consumers to borrow money.
The news cheered investors and US stocks surged more than 3% on Tuesday - their biggest one-day gain in five years.
However, there are continued signs the region's previously strong economic growth could be slowing at a time of rising energy and food costs.
Some fear these factors could prevent further equity market gains.
On Wall Street, the benchmark Dow Jones industrial average soared 416.66 points, or 3.55%, to close at 12,156.81.
India's industrial output grew 5.3 % in January from a year earlier, but slowed sharply from the previous month's figure of 7.7%.
In London, the FTSE 100 index of leading shares ended 1% higher.
A survey on Wednesday also showed Australian consumer sentiment fell in March to its lowest in more than 14 years.
"The key to any sustainable rally is going to be an improvement on the credit side," said Michael Darda, chief economist at MKM Partners.
And Chinese stocks closed 2.30% down, on worries high inflation will lead to more steps to slow the country's economy.
"But this is positive. The Fed's making a major effort to get liquidity and credit into the cracks and crevices of the financial system that need it the most."
Meanwhile, in Japan - which, like other Asian nations, is highly reliant on exports to the US - new figures showed that economic growth remained steady in the fourth quarter.
The dollar rose sharply against the yen and rebounded from a record low against the euro.
But, despite these better-than-forecast growth figures, analysts have warned of a possible slowdown in the first quarter.
Crunch continues
The authorities are worried that the credit crunch shows few signs of easing, eight months after the crisis began.
UK home loans tumble to new low In the UK, mortgage lenders announced a sharp slowdown in the number of home loans that are being approved due to the difficulties that many banks face raising funds on commercial money markets.
The crisis in credit markets has threatened world economic growth and many expect the US, the world's largest economy, to enter a recession.
The problems in credit markets emerged last summer when banks began revealing losses related to investments in the ailing US housing market.
Record defaults on US home loans, especially to sub-prime borrowers with poor credit histories, caused the value of these assets to plunge and made banks reluctant to lend to each other.
'Crisis of confidence'
BBC Economics Editor Evan Davis questioned whether the central banks' actions would help re-instil confidence into nervous credit markets in the longer term.
He says the banks' actions could help solve any liquidity problems - a temporary shortage of cash - faced by financial institutions, but would do little to ease worries about long-term solvency at some financial institutions.
"We have been in a second phase of the credit crunch which has seen a reluctance for banks to lend to each other not out of liquidity shortages, but out of a general worry that the banks they lend to won't be able to pay them back," he said.
"It is, in other words, a crisis of confidence in bank solvency. It's not that banks don't have cash to lend; it's that they don't trust each other to have sufficient assets."
Specific measures
Each of the central banks announced measures specific to their own markets, which follow on from similar emergency auctions of cash in December.
The US Federal Reserve is making up to $200bn (£99bn) available to financial institutions for 28 days instead of the usual overnight auctions.
It will also allow financial institutions to borrow the money using risky assets as collateral.
These assets could include mortgage-backed securities - the source of the current crisis in credit markets.
The Fed is also extending a "swap lines" scheme, that will provide $30bn and $6bn through the ECB and the Swiss National Bank respectively.
The ECB is making available another $15bn, despite having said on Friday that it had no plans to do so because the market problems that had made the last auctions necessary were no longer there.
