Asia shares find support, still waiting on stimulus

On Wall Street, the Dow had gained 0.93 percent, while the S&P 500 rose 0.82 percent and the Nasdaq 0.90 percent.

The bounce was led by retailers, with Target Corp surging 20 percent and Lowe's Cos Inc 10 percent after upbeat results.

Minutes of the Federal Reserve's July meeting showed policymakers were deeply divided over whether to cut interest rates but were united in wanting to signal they were not on a preset path to more easing.

Indeed, while a "couple" of Fed members favoured a deeper cut of half a point, "several" favoured no change at all.

That reluctance did not seem to gel with the market's aggressive pricing for over 100 basis points of easing by the end of 2020.

Treasuries were sold in response and two-year yields rose to 1.59 percent and away from last week's low of 1.467 percent.

"The key message from the Fed minutes is that the 25 basis-point cut in July was just a calibration, a mid-cycle adjustment and not the start of a new easing cycle," said Rodrigo Catril, a senior FX strategist at NAB.

Hopes for US fiscal stimulus also got a knock when President Donald Trump reversed course and said he was not looking at cutting payroll taxes.

Much now depends on how dovish Fed Chair Jerome Powell chooses to be in his Jackson Hole speech on Friday.

"The most sensitive comments will revolve around whether Powell is willing to reaffirm a view that the easing cycle is a "mid-cycle adjustment" or align more closely to market thinking," said Alan Ruskin, macro strategist at Deutsche Bank.

"If he sticks to the old language as is most likely, it would affirm that he is still confident that the strength of consumption, in combination with modest Fed easing, will be sufficient to keep the recovery broadly on track."

That would be more hawkish than expected and would likely lift the dollar further, he said.

The dollar had already bounced overnight, rising to 98.263 on a basket of currencies from a low of 97.948. It also reached 106.57 yen from a trough of 106.21.

The euro edged back to $1.1089 from a top of $1.1107, not helped by a gloomy economic outlook from Germany's finance ministry.

A range of manufacturing surveys from across the globe are due later on Thursday and risks are they will show a further slowdown in activity, especially in Europe.

Also due are minutes from the European Central Bank's last policy meeting and markets are looking for more detail on exactly when and how aggressively it might ease policy.

In commodity markets, spot gold was steady at $1,502.53.

Oil prices firmed after US government data showed a drawdown in domestic crude stocks.

Brent crude futures rose 25 cents to $60.55, while US crude gained 34 cents to $56.02 a barrel.