Relative calm returned to world markets on Friday after a week that gave dollar/yen its biggest smashing since 2008, wiped billions off share prices and saw a stampede into top-rated government bonds and gold.
Japan's Nikkei, which was closed for a public holiday during Thursday's global rout, fell 5.4 %, but there was relief elsewhere as the dollar's brutal fall against the yen this week petered out and European stocks rebounded 2.5 %.
Wall Street looked set to bounce more than 1 %, also lifted by stronger-than-expected U.S. retail sales figures, after five straight days of falls that saw the S&P 500 touch a 2-year low on Thursday.
Oil prices climbed off 12-year lows [O/R] too and safe-haven gold, was on course for its best week in four years. U.S. and German government bonds all cooled after their sizzling last few days.
"All the market has been shattered," said ABN Amro chief investment officer Didier Duret.
"It has been driven by a lot of speculation. The strength of the yen has created discomfort too, but this is short-term."
He said the Bank of Japan could intervene in FX markets and that data in coming weeks should ease global recession worries.
The first reading of Q4 2015 euro zone and German GDP figures came in solidly, both with 0.3 % growth quarter-on-quarter. But that was offset slightly by disappointing growth figures from Italy and a fall in euro zone industrial output.
Investors have been fleeing stocks and running to safe havens such as bonds and gold, spooked by the direction of the world economy.
Only six weeks ago cheap oil was still expected to cushion the outlook for growth, but tumbling energy prices are upending the economies of oil-producing countries.
Increasingly investors are nervous about central banks' negative interest rate policies, which some fear could be doing irreparable damage to financial institutions by crushing profitability.
Bank stocks in Europe, where negative interest rates are most prevalent and are expected to go lower still, have been routed again this week and fallen almost 30 % since the start of the year. On Friday they bounced 3 %.
"I do not expect a collapse or major financial crisis like the Lehman crisis but it will take some time before market sentiment will improve," said Tsuyoshi Shimizu, chief strategist at Mizuho Asset Management.
Despite the rise in European stocks, the overnight drop in Asia meant MSCI's 46-country All World index was down for a sixth straight session and almost 4 % for the week.
The hardest hit has been Japan's Nikkei which fell 5.4 % to a 15-month low on Friday and posted a weekly loss of 11.1 %, its biggest since October 2008, as this week's sudden spike in the yen took most investors by surprise.
That surge in the yen has come as traders have all but cancelled bets on the Federal Reserve raising U.S. interest rates again this year, which in turn has undermined the dollar and rattled markets generally.
Longer-term U.S. debt yields had kicked up to 1.69 % in European trading having delved as deep as 1.53 % on Thursday. They started the year at 2.3 %.
Fed fund futures are pricing in shallow tightening paths. The market implies a rate of 45 basis points for the end of this year, 60 basis points at the end of 2017 and 90 by the close of 2018.
In Europe, German Bunds also saw profit-taking, and Portuguese bonds made back some ground having suffered their worst selloff in 2-1/2 years on Thursday on worries its new government may not be sticking to its bailout programme.
Portuguese yields were back below 4 % though they remained on track to post their biggest weekly jump since the heat of the euro zone crisis in May 2012, before ECB President Mario Draghi said the central bank would do "whatever it takes" to save the euro.
"As long as the ECB is there to support Portugal, that limits the losses," said Jan von Gerich, fixed income chief analyst at Nordea. "But if there is serious fiscal slippage and Portugal loses its final investment grade rating, forcing the ECB to drop them from the QE programme, the losses could be huge."
Commodities markets were calmer. Brent and U.S. oil prices were both up roughly 5 % from Thursday's near 13-year low, helped by comments from an OPEC energy minister sparking hopes of a coordinated production cut.
Gold dipped to $1,237 after soaring 4 % the previous day and was still set for its best week in four years after the stock and FX turmoil sent investors into safe haven assets.
"Today has bought a small amount of relief for markets – oil is up, equities are up, credit is up (spreads tighter) and safer government bonds are down. But it’s all very fragile," said Aberdeen Asset Management investment manager Luke Hickmore.
"There’s something bigger at play here than just what is happening day in and day out. The rollercoaster will keep going into next week."