Exchanges in Shanghai, Hong Kong and Singapore were closed for holidays, but Tokyo’s Nikkei index crawled up by 1 per cent.

Other markets saw more substantial gains: plus 4 per cent in Australia and 3 per cent in new Zealand. However analysts view markets as near paralysis because of concerns over counterparty risk.

In Europe the tea leaves are also contradictory. Everyone is waiting for the US Senate vote on the US$ 700 billion rescue plan.

The new proposal before the Senate is like the first version rejected by the House of Representatives, but with some changes.

However, US public opinion remains opposed to saving the financial institutions that caused the crisis. Many ask why US taxpayers should foot the bill for someone else’s mistakes after years of greedy laissez-faire.

Some economic gurus have also called on US lawmakers to let the market take care of itself.

Meanwhile data from the Bank of Japan suggests that business confidence is dropping.

This month's figure for confidence among major manufacturers is minus three, down from five in the previous quarter.

It is the first time it has been in negative territory since June 2003.

What it means is that a majority of Japan's biggest firms are now pessimistic about the conditions they are operating in.