Seoul: College senior Kim Mi-jin is unfazed by global financial turmoil.

“I feel like it’s a short-term factor," she said, sitting in a Starbucks Corp. coffee shop located near the old royal palace and studying for an exam to be a securities consultant. “There are many efforts being made in America to

Positive outlook: Singapore Prime Minister Lee Hsien Loong.

If a rebound in Asian financial markets this week is anything to go by, such confidence looks increasingly warranted.

Massive efforts in the past two weeks by central banks, including the US Federal Reserve and the Bank of Japan (BoJ), to pump liquidity into the world financial system to halt the crisis seem to be soothing the frayed nerves of investors.

Wall Street has rallied much of this week, providing a boost to most Asian stock markets. Japan’s Nikkei 225 index rose three of four sessions through Thursday on Asia’s largest bourse. South Korean stocks gained four days in a row. Still, economists warn, the situation could quickly blow up again.

“I think the word is fragile," David Cohen, head of Asian forecasting for Action Economics, Llc. in Singapore, said in describing the market situation. “One more headline for some hedge fund, and they could be melting down again."

Beyond the markets, economists say Asia’s fast growing economies are better placed than in past crises to escape damage, given stronger intra-region demand, the emergence of China and India as growth engines, and increased diversity in export markets.

Nevertheless, the angst of US consumers, who account for 20% of the global economy, still looms large. “It really depends on how badly US growth gets hit," Bill Belchere, chief Asian economist at Macquarie Securities Ltd in Hong Kong, said of the outlook for the region. That said, he would be “stunned" if the fallout led to a recession in Asia, he added.

Economists also emphasize that Asia is in good shape in terms of its overall fiscal position, with current account surpluses and vast foreign reserves shoring up the financial systems of many countries.

Belchere said recent quarterly economic growth figures for Singapore, Hong Kong, South Korea and China were all stronger than expected, providing some buffer.

Governments, while saying they are closely monitoring signs of any subprime impact on their economies, have expressed optimism the region is basically solid.

“This is not a financial crisis in Asia," Singapore Prime Minister Lee Hsien Loong said in a speech on Sunday, his country’s National Day. “This is a crisis in the advanced countries that has affected us. I believe the mid- to long-term prospects are very good."

Australian treasurer Peter Costello said on Tuesday his country’s economy would ride out any US downturn. South Korea’s vice-finance minister Lim Young-rok sees opportunities in other markets.

“Even if the US economy slows, South Korea’s exports will remain robust if China, newly developing countries, Europe and Japan continue to show strong growth," Lim said on Thursday.

How badly would Japan be hit if conditions deteriorate is a big question.

Though analysts say the country’s vulnerability to the subprime crisis itself is limited, Asia’s biggest economy has not escaped the global fallout.

Most damaging has been a jump in the yen against the dollar as investors, hit by subprime woes, and spooked by a possible US economic downturn, scramble to reduce exposure to the risky yen carry trade. This involves selling Japan’s low-yielding currency in favour of higher-yielding investments in other markets. To unwind their positions, investors buy back the yen, driving up its value. The yen soared last week, at one point hitting 111.80 to the dollar—its highest since June 2006.?It has since fallen back, though remaining well off lows for the year.

Share prices of exporters including Toyota Motor Corp. and Sony Corp. have slumped during the subprime storm. A stronger yen can make their products more expensive in overseas markets, also potentially reducing the value of profits earned abroad when brought back home.

Still, BoJ governor Toshihiko Fukui on Thursday remained optimistic about Japan’s economy. “Long-lasting economic growth led by a favourable cycle of production, income and consumption will likely continue," he said.

Some Asian companies see a chance to increase sales in the US even if consumers end up tightening purse strings. Kim Deuk-ju, finance chief at South Korea’s Kia Motors Corp., which exports about 25% of its vehicles to the US, said Japanese automakers skilfully gained market share during previous economic crises, such as in the oil shocks of the 1970s, with their fuel-efficient cars. A possible slowdown in the US provides “some risk but at the same time some opportunity" for Kia.