The benchmark 225-issue Nikkei Stock Average closed the morning session up 11.50 points, or 0.12 percent, at 9,661.60 — after the opening of the Tokyo Stock Exchange was delayed by 30 minutes for a second day in response to Tuesday's terror attacks in the United States. The dollar was moderately higher against the yen.
Britain's FTSE 100 index seesawed in a 230-point range and climbed in late trade to close up 136.1 points or 2.87 percent at a high of 4,882.1, battling back from three-year lows after a near 10-percent slide from Tuesday's high before the attacks.
London bankers and brokers went about their work in subdued silence, many still coming to grips with the death of friends and colleagues in the staggering assaults on New York's World Trade Center.
Safe haven bonds and gold lost ground, returning some of the massive gains made immediately after the attacks. Oil prices, which had spiked on fears of Middle Eastern conflict, also fell after OPEC offered reassurances about the security of world supplies.
The dollar, supported by liquidity supplied by central banks, nearly halved its losses of the previous 24 hours.
The European Central Bank, the Swiss National Bank and the Bank of Japan all moved to add billions of dollars of liquidity to the financial system.
Meanwhile, Japan's main stock index closed down 6.6 percent Wednesday as traders shed stocks in companies with global operations. Even though it was seen as only a matter of time before the Nikkei fell below 10,000 points, the turmoil after the terror attacks fueled Wednesday's massive sell-off, traders said.
Wall Street Won't Reopen Thursday
U.S. markets stayed shuttered on Wednesday and uncertainty lingered about when and how smoothly securities trading would resume.
The Securities and Exchange , which regulates the U.S. stock markets, briefly toyed with a Thursday opening. But on Wednesday afternoon, New York Stock Exchange Chairman Richard Grasso announced equity markets would begin trading as early as Friday, but no later than Monday.
Along with NUSE, the Nasdaq, the No. 2 U.S. stock market, and the American Stock Exchange will remain shut on Thursday.
Trading in U.S. government debt, by contrast, was set to resume on Thursday at 8 a.m. EDT.
The electronic Nasdaq stock market, best known for trading technology icons like Microsoft Corp., said in a statement: "Nasdaq expects trading to resume as soon as possible. We expect to make an announcement later today."
But the investment community remained skeptical about a speedy resumption of trading, especially in light of the human toll the attack is believed to have taken on the financial community.
The New York Board of Trade (NYBOT), which trades coffee, sugar, cocoa, cotton and orange juice futures and options, was significantly damaged in Tuesday's airplane attacks. The exchange's backup facility in Long Island City, New York, is not expected to reopen until Monday, Sept. 17, at the earliest.
Some of the biggest names among U.S. and world financial services firms have offices in the World Trade Center, including investment bank Morgan Stanley, which is the building's largest tenant with 50 floors.
Switzerland's Credit Suisse Group and Germany's Commerzbank, Deutsche Bank AG, Cantor Fitzgerald and market data firm Thomson Financial, a unit of Thomson Corp., also have offices in the complex.
Assessing Long-Term Damage
Meanwhile, economists continued to express fears about the effect of the terrorist attacks on the world's already shaky economy.
"I think we have certified for all practical purposes a recession as a result of this with the market being as fragile as it is," said Stanley Nabi, a managing director at Credit Suisse Asset Management, which oversees about $110 billion.
"As this enormous tragedy is unprecedented in American history no one can have any comfort in guessing what the financial markets' outcome will be," said Michael Holland, chairman of New York-based money manager Holland & Company LLC.
"Currently, all of us are concerned with the human casualties, and the markets will simply have to sort themselves out over the next few weeks," Holland added.
Not all analysts were picturing an all-out financial disaster. Some figured investors will have time to adjust to the crisis. The financial pros also cited the eventual benefit of the U.S. Federal Reserve's string of interest-rate cuts, which are expected to lift corporate profits by next year.
``I think the market was in a position where it was really oversold,'' said Woody Dorsey, a behavioral economist at research firm Market Semiotics, who bases his predictions on market psychology. ``I think foreign markets gave you the harshest reaction and the shock of the trauma has occurred. I think the markets are going to rally near term.''
Howard Kornblue, a Scottsdale, Arizona-based portfolio manager at ING Pilgrim, said that after an initial drop, there could be a rebound as people pick up stocks from the bargain basement.
"It presents some buying opportunity, and you end up seeing a rally actually because may be some people recognize that that kind of thing financially has short-term implications," Kornblue said.
"If there is one thing that happens when you have wars or near-wars, you revive the interest in federal spending to improve things," said Robert Stovall, senior vice president and market strategist at Prudential Securities. "Nothing brings a country out of a slowdown quicker than a national disaster, which this is."
Reuters and the Associated Press contributed to this report.