Asia shares turned upwards Wednesday, with markets closing mostly higher and some major indexes rebounding. It was the first positive sign of stability amidst lingering worries about China and falling commodity prices and follows an unstable start to the year.

Chinese markets, however, moved downwards on the back of sluggish trade data with the Shanghai composite erasing early gains of as much as 0.74 percent to trade down 0.46 percent. The smaller Shenzhen composite was down 0.89 percent, while the CSI 300 was down 0.16 percent.

Official data showed that China’s December exports showed a drop of 1.4 percent on year in dollar-denominated terms, and imports slid 7.6 percent, leaving a trade surplus of $60.09 billion for the month.

Renminbi Market Driver

Bank of America Merrill Lynch said in a note on Tuesday that the volatility “is not likely about the Chinese stock market itself, but instead all about one of the drivers of the Chinese stock market – namely the Chinese currency, the renminbi “, pointing out that the currency fell more than 1.5 percent against the dollar last week.

The People’s Bank of China (PBOC) has been trying to stabilize the markets by keeping the yuan mid-point fix steady once again, setting it at 6.5630, compared to yesterday’s fix of 6.5628.

Japan’s Nikkei 225 recovered all of Tuesday’s 2.71 percent drop, to close 496.67 points, or 2.88 percent, higher at 17,715.63, while South Korea’s Kospi saw gains of 25.42 points, or 1.34 percent, to end at 1,916.28.

The Australian dollar initially strengthened after yuan-denominated China trade figures were released, rising as high as $0.7048, compared with about $0.7018 before the data. But the Aussie later retreated to about $0.7021.

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