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Asian stocks rallied for the first time in three days, along with the sterling and other currencies, as investors lifted beaten down assets after Britain’s exit from the European Union.  

European markets seemed to follow Asian stocks to climb, according to financial bookmakers. Meanwhile, the U.S. stock futures have seen a 0.8 percent increase, marking a strong opening on Wall Street after struggling with a two-day decline.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose by about 0.1 percent, but the slight increase retreated, which sent stocks of Japan to advance more than 3 percent from session lows, leading other Asian markets higher. The Nikkei increased 0.6 percent by early afternoon.   

However, on a signal that investors are worried about, trading volumes were seen light, while price action remained unstable throughout the markets.

A senior technical analyst at Mizuho Securities Yutaka Miura said, "Short-covering in the currency market and U.S. futures market is limiting selling,"

"But overall sentiment remains fragile."

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"Friday's Brexit jump scare has faded, but markets are still worried" toward the potential effect on global demand, a trader at SLW brokerage João Paulo de Gracia Corrêa said.

Unstable Brexit Impact

Japan’s policymakers vowed to China in order to protect their economies, as well as their markets from the weakening impact of Brexit.

Premier Li Keqiang stated at the World Economic Forum: "It's hard to avoid short-term volatility in China's capital markets, but we won't allow roller-coaster rides and drastic changes in the capital markets,"

Elsewhere in currency markets, sterling is currently trading at $1.3291, after recording losses in a three-decade low of $1.3122 amid Monday’s session, marking its lowest level on the record.

Against Japan’s currency, sterling added 1 percent, to settle at 135.54, slightly away from Friday’s 3-1/2 year low of 133.18.

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The euro settled at 82.93 pence after advancing to a two-year peak of 83.79 pence during the course of Monday’s session.  

The euro posted slightly lower to $1.1060, slightly away from Friday’s three-month low of $1.0912 after Brexit.

A managing director at BK Asset Management Kathy Lien wrote to clients, "In the near term, risk aversion and market uncertainty makes the euro less attractive to investors,"

"In the long run, Brexit also raises questions about the Eurozone's viability because if major countries like Britain start dropping out the EU, nationalism could drive smaller Eurozone nations to exit out of the euro," she stated and added that she anticipates the euro to "make another run" for the $1.0900 level.

Early signals of a cautious recoup in demand for riskier assets were marked in the high-yielding Aussie and the New Zealand dollar.

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