Asian Shares bounce back from losses

Asian markets headed higher on Wednesday, recovering from the previous session's steep losses, despite disappointing economic news from Japan. Japan's Nikkei 225 led the region's gains, closing up 2.7% at 17,388.15, after losing more than 4% on Tuesday.

Investors ignored data that showed Japanese factory output shrank by 0.5% in August from July, and retail sales also fell short of expectations. Investors are awaiting the Bank of Japan's business confidence survey.

The central bank's quarterly Tankan survey due on Thursday is expected to show that business sentiment worsened in the three months to September.

Marcel Thieliant, an economist at Capital Economics, said the second consecutive drop in industrial production in August suggested that Japan's economy shrank again in the quarter that ends in September.

"Additional easing by the Bank of Japan next month looks all but inevitable," he said in a note.

Shares in Japan Tobacco fell 6.7% on concerns that it has paid too much to buy the rights for Reynolds American's Natural American Spirit tobacco brand outside the US for 600bn yen ($5bn).

Tax cut

Chinese shares headed higher as investors took in news of a new tax cut on some car sales.

A government announcement late on Tuesday said the sales tax on cars with smaller engines would be halved. The cut will be effective from Thursday this week until the end of next year. China is the world's biggest market for cars and the new tax cut will apply to about 70% of the market.

Hong Kong's  Hang Seng index closed up 1.14% at 20,851.32, while the Shanghai Composite closed up 0.48% at 3,052.78.

Australia's benchmark S&P/ASX 200 index closed up 2.1% at 5,021.60 after hitting a two-year low on Tuesday.

Meanwhile, South Korea's Kopsi index ended up 1% to 1,962.91 as it reopened following public holidays.