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The constellation of asset price action reflected risk taking among investors, who had been mostly driven for the past few weeks by fears that still lingered about a euro zone break up and global recession.

The Australian dollar rallied 1 percent, climbing above $1.06, U.S. Treasury yields edged higher and gold tumbled on a sudden large sell order in thin trading conditions.

The Swiss franc, which had been along with gold the safe haven of choice for investors, kept to a relatively tight trading range above 1.2000 per euro, the day after the Swiss central bank said it would buy foreign currencies in "unlimited quantities" to enforce a cap on the currency versus the euro.

"The stock market is rebounding after steep declines in recent days, but the situation has not changed and volatility remains high," said Korea Investment Trust Management fund manager Kim Young-il in Seoul.

"Uncertainty is high about the direction of the U.S. economy, and uncertainty is even higher in Europe as investors are not sure whether the bloc is going in the right direction."

Japan's Nikkei share average .N225 rose 2.0 percent, coming off a two-and-a-half year closing low on Tuesday, and MSCI's broadest index of Asia Pacific shares outside Japan .MIAPJ0000PUS gained 2.3 percent.

The biggest gainers in the MSCI index were the tech and materials sectors, as electronics exporters such as South Korea's Samsung Electronics (005930.KS) and miners like Australia's BHP Billiton (BHP.AX) posted strong gains.

Shares of electronics makers have taken some of the worst beatings in the global market rout of recent weeks on mounting worries about slowing consumer and corporate demand.

The Nikkei was trading at a price-to-book ratio of 0.95 as of Tuesday's close. That was the lowest since August 24 and before that the lowest since April 1, 2009. A price-to-book ratio below 1.0 for the Nikkei means that the market value of every stock in the index is less than if all the companies' assets were liquidated.

Value-driven investors, though, were not returning in hordes to scoop up bargains.

"It's a short-term rebound. I'm rather pessimistic," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

AUSTERITY DEMANDS

The euro zone's most indebted and high risk nations were scrambling on Wednesday to convince investors and the rest of Europe of their commitment to tackle their debt problems, even as the bloc's main paymaster Germany faced increasing opposition to further aid.

An unexpected jump in a U.S. services sector index, however, helped stocks on Wall Street pare losses into the close and end down less than 1 percent.

S&P 500 futures traded in Asia rose about 0.6 percent on Wednesday. .N

Investors are now focusing on a speech by U.S. President Barack Obama to Congress on Thursday, which CNN reported would include plans for a $300 billion jobs package.

The euro rose about 0.4 percent to around $1.4060, still not far from a two-month trough plumbed on Tuesday.

The dollar, pressured by disappointment that the Bank of Japan took no action at a policy meeting, was down 0.6 percent at around 77.19 yen, coming off an overnight high of 77.74.

Speculation had risen on Tuesday that Japan may introduce measures to curb currency strength after Switzerland's shock move.

The Swiss franc plunged nearly 10 percent against the euro on Tuesday, its biggest daily fall ever, after the Swiss central bank jolted markets by drawing a line in the sand on how much the currency can gain.

"While we would not stand in the way of the SNB move, we question whether the SNB will be fully successful in maintaining 1.20 if global risks accelerate," BNP Paribas strategists wrote in a note.

In commodities markets, spot gold fell further after striking a new record above $1,920 following the Swiss National Bank move. A large sell order caught traders off guard and triggered automatic sell orders, taking the metal to as low as

$1,826.18.

Brent crude prices rose on Tuesday after three straight declines as tight North Sea supplies, continuing uncertainty about Libya's oil and more tropical storms boosted prices.

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Brent crude was up about 0.4 percent to $113.30 a barrel on Wednesday, while U.S. crude gained 0.4 percent to $86.35 a barrel.

The biggest U.S. bank said Joe Price, head of consumer banking, and Sallie Krawcheck, head of global wealth and investment management, are leaving. Price was a former chief financial officer of the company, and Krawcheck was a former CFO of Citigroup and leader of its Smith Barney brokerage unit.

Chief Executive Brian Moynihan named commercial banking head David Darnell and investment banking head Tom Montag, a former Goldman Sachs executive, to new positions as co-chief operating officers.

The changes are effective immediately, the company said.

"It seems apparent Moynihan is under pressure to make some bold moves," said David Dietze, chief investment strategist at Services in Summit, New Jersey. "Obviously there is disagreement among people at the top who have lots of options and lots of experience." Point View Financial owns BofA shares.

In their new roles, Darnell will oversee consumer bank operations, while Montag will run divisions that work with corporate and institutional customers.

Krawcheck was in charge of the sprawling Merrill Lynch brokerage operation as well as of the bank's private banking units.

BofA stock rose slightly to $7.01 in after-hours trading after closing at $6.99 on the New York Stock Exchange on Tuesday.

(Reporting by Joe Rauch; editing by Carol Bishopric)

Using some of the strongest language by a central bank in the modern era, the SNB said it would buy other currencies in unlimited quantities and use all means within its power to hold to the target.

The move immediately knocked around 8 percent off the value of the franc, which has soared by a third since the collapse of Lehman Brothers in 2008 as investors used it as a safe haven from the euro zone's debt crisis and stock market turmoil.

"The current massive overvaluation of the Swiss franc poses an acute threat to the Swiss economy and carries the risk of a deflationary development," the SNB said in a statement.

"The SNB will enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities."

The move prompted speculation that Japan might follow suit to cap the rising yen, which is also regarded as a safe haven and which could derail a recovery from the March earthquake and tsunami that tipped the country into recession.

"Japan ... will probably bring up the strong yen as a topic at the G7 meeting this weekend," said Koichi Haji, chief economist at the NLI research institute in Tokyo. "It will try to seek understanding from G7 counterparts to intervene unilaterally."

The SNB, which holds its quarterly monetary policy review on Sep. 15, added that even at a rate of 1.20 to the euro, the franc was still high and should continue to weaken over time.

"If the economic outlook and deflationary risks so require, the SNB will take further measures," it said.

The SNB has warned that economic growth -- still a healthy 2.3 percent in the second quarter -- is set to slow sharply in the coming months as the strong franc makes Swiss exports -- from luxury watches to drugs -- prohibitively expensive.

The franc nearly touched parity with the common currency on August 9. It fell 8.5 percent against the euro after the announcement to 1.203 francs at 0821 GMT and also dipped almost 8 percent against the dollar to 0.8483.

"That was the single largest foreign exchange move I have ever seen," said World First chief economist Jeremy Cook. "This dwarfs moves seen post Lehman Brothers, 7/7, and other major geo-political events in the past decade."

The European Central Bank said the SNB had made the decision of its own accord. Last month, ECB President Jean-Claude Trichet urged countries not to go it alone with currency interventions but rather take any action as a group.

MERCY

Analysts said the SNB should be able to defend the level of 1.20 francs per euro but its success depended on efforts to deal with the euro zone's debt problems.

"In the very probable event that the eurozone crisis worsens in the coming months, intervention could be very costly for the SNB," said Rabobank senior currency strategist Jane Foley.

"It will be the direction taken by the euro zone crisis that will determine how successful the SNB will be in protecting the Swiss franc from strength in the coming months."

The SNB also set a formal exchange rate target in 1978 -- against the German Mark -- when the franc was soaring in the turbulent aftermath of the oil crisis.

"The last time they tried it was in the 1970s and it worked in the short term, but it came at an enormous cost and led to a huge burst of inflation," said Simon Derrick, head of currency research at Bank of New York Mellon.

"The move now should work in the short term, but in the long term they are providing investors who are looking to exit the euro zone debt crisis with an easy route."

The SNB move came just after data showed Swiss inflation eased by more than expected in August, dipping 0.3 percent from a month earlier, lower than a median forecast in a Reuters poll for a fall of 0.1 percent.

The SNB cut an already low interest rate target to nil on August 3. It is also boosting the amount of liquidity in the banking system, and had threatened further steps.

Those measures had temporarily helped the franc weaken, falling some 18 percent against the euro, but it jumped again last week as worries about the health of the global economy intensified, increasing pressure on the SNB to act again.

Expectations that the SNB could intervene had increased in recent days after top Swiss politicians and business groups expressed support for the central bank as well as the idea of an exchange rate target.

Such political solidarity is in contrast to earlier this year when the central bank came under fire for running up a huge loss in 2010 trying to keep a lid on the franc, prompting calls for SNB chairman Philipp Hildebrand to resign.

The difference now is that the strong currency is beginning to throttle the economy. Exports have weakened and the tourism sector has suffered; overnight hotel stays by foreign visitors fell 4 percent on the year in July.

Company profits have also begun to suffer, with some businesses extending working hours and others wanting to pay staff in euros in a bid to offset the rampant currency.

Swiss speciality chemicals maker Clariant AG (CLN.VX) cut its 2011 sales target on Monday due to the franc, and the key Swiss banking sector has also seen profits squeezed.

To help ease some of the ill effects of the strong currency, the Swiss government has proposed 870 million francs in aid to boost unemployment insurance and other steps, including support for the hotels sector.

Rudolf Minsch, chief economist at business lobby group Economiesuisse, told Reuters he backed the move:

"This is a temporary measure that is absolutely needed to keep jobs in Switzerland and in the export industry because even at the value of 1.20, the franc is strongly overvalued."

(Additional reporting by Katie Reid)

Core German debt yields, however, stayed at historic lows, well below 2 percent, signaling a frenzied search for safety was still in place.

World stocks as measured by MSCI were down 0.2 percent, mainly because of a catch-up fall of 2.2 percent on Japan's Nikkei.

European stocks fell more than 4 percent on Monday on renewed worries about the euro zone's ability to solve its debt problems and its banking sector's exposure to both peripheral bonds and a U.S. law suit over mortgage-backed securities.

Tuesday's market moves were typical of those that accompany big market moves, in which investors pause before deciding which direction comes next.

"These persistent euro zone worries are back in play once again amidst signs that austerity measures may be faltering, whilst last Friday's disappointing (U.S.) non-farm payrolls (data) continue to leave the markets with something of a hangover," said Cameron Peacock, analyst at IG Markets.

Market reaction to the euro zone crisis is being exaggerated by global concern about the state of the U.S. economy, which is in danger of slipping back into recession.

Europe's own economy is also weak.

Japanese, Chinese and South Korean financial regulators discussed the global threats in a conference call.

"We are already at stall speed in the U.S. and Europe, which means we are now more likely than not to see a recession," said Tharman Shanmugaratnam, Singapore's finance minister.

SEEKING OPPORTUNITIES

The pan-European FTSEurofirst 300 was up 0.3 percent but the banking sector remained under stress, falling 0.4 percent.

Some investors were looking for opportunities among the turmoil. The euro, for example, jumped 1 percent on the day against the Swiss franc with traders citing buying by a U.S. investment bank.

The euro traded flat on the day against the dollar at around $1.41, trimming losses after falling to a 1 1/2-mth low of $1.4038 in earlier trade.

Euro zone government bonds were flat, with the 10-year Bund yielding 1.837 percent.

(Additional reporting by Atul Prakash)