Wall Street suffered sharp losses after US President Barack Obama said the US may have to resort to bankruptcy proceedings to rescue ailing carmakers General Motors and Chrysler. The Dow Jones closed 3.27% lower.
Nikkei closed up 5.12%, buoyed by continuing gains on Wall Street, after the Nikkei slipped to 26-year lows last week. The Japanese government announced last month it is to launch another stimulus package.
Asian stocks jumped on Wednesday, after US banking giant Citigroup unveiled better-than-expected results. Japanese share prices rose nearly four percent in early trade while Wall Street soared six percent overnight.
US stocks plunged following news on the lack of a new Chinese economic stimulus plan, and led by fears about the survival of GM. In Europe a sober mood followed yesterday's rallying, with the FTSEurofirst 300 index closing down 3.6 percent.