By 
By Rafael Nam
Regional bonds, seen as safer bets in volatile times, gained in a sign of the risk apprehension. The euro recovered after hitting a one-month low against the dollar on Tuesday, but gains were limited ahead of an expected interest rate cut by the European Central Bank on Thursday.
Weak economic data and a bleak outlook for quarterly earnings results has hampered what had been a promising start to the year, though the continued flood of new corporate bond sales globally at least points to investors' willingness to take on risk.
"We know the outlook is awful, but then we know that the market has priced in a very bleak scenario. So you've got this tug-of-war that occurs between the bad news and the deep valuation (discount)," said Lee Mickelburough, a partner at Perennial Growth Management in Australia.
The MSCI index of Asia-Pacific stocks outside Japan <.MIAPJ0000PUS> advanced 1.5 percent as of 0215 GMT , rebounding from a 9 percent loss over the previous five sessions.
The index remains down more than 3 percent for the year.
Concerns about the global economy remain. Data on Tuesday showed U.S. imports fell a record 12 percent in November, a bad omen for export-dependent Asian companies that rely on U.S. consumers to power earnings.
Corporate earnings are being hit across the world, resulting in job cuts that are spreading from the financial sector to manufacturers such as truck maker Volvo
Still, Asian shares posted gains on Wednesday, as some investors viewed recent steep declines in shares such as Sony Corp <6758.T> as overdone.
The Nikkei average <.N225> advanced 0.8 percent, recovering from its nearly 5 percent drop on Tuesday.
Shares in Hong Kong <.HSI> and Singapore <.FTSTI> advanced more than 1 percent, while indexes in South Korea <.KS11>, Australia <.AXJO>, Shanghai <.SSEC> and Taiwan <.TWII> posted more modest gains.
NO CERTAINTY
U.S. crude oil futures rose $1.19 to $38.97 a barrel as cold weather in the United States pushed up heating oil demand and on comments by OPEC member Saudi Arabia that it had made deep production cuts.
Oil producers have agreed to cut output to stem a slide in crude, which has fallen sharply since hitting a record high just under $150 a barrel in July. Oil prices, however, have started the year in range-bound trade.
Encouraged by falling inflation, central banks are cutting interest rates, and policy makers are implementing big stimulus plans to resuscitate economic growth.
The European Central Bank meets on Thursday. It is expected to cut interest rates by 50 basis points from the current 2.5 percent, which remains at a higher level than the near-zero rates in the United States and Japan.
The euro rose 0.6 percent to $1.3264 from late New York trade, after hitting a one-month low of $1.3140 on trading platform EBS in U.S. trading.
Against the yen, the single currency gained 0.6 percent to 118.70 yen. It had fallen as low as 117.13 yen on EBS in U.S. trading, the lowest since early December.
The lack of certainty is being reflected by the continued gains in government debt despite yields at their lowest in years.
Australian three-year bond futures added 0.025 points to 96.870, near an all-time high of 96.88. Aussie 10-year bond futures contract rose 0.010 points to 96.050, off a record high of 96.065.
Still there are also signs that investors are willing to add risk in the hunt for higher yield, as evidenced by the surge in global corporate debt issuance this month, both from government-backed lenders and non-financial firms.
European credit markets were on track to set a record for supply in January, with more than 14 billion euros worth of non-financial euro-denominated investment-grade bonds sold. That approaches the record 25 billion euros raised in January 2003.
