Europe's main equity markets rebounded Friday from a global rout, but investors remained anxious that rising interest rates would spark a fresh recession.
Investors were shaken this week after the US Federal Reserve unleashed its biggest hike in borrowing costs for almost 30 years to tackle runaway consumer prices.
The Bank of England and Swiss central bank also hiked interest rates on Thursday.
On Friday, however, the Bank of Japan stood by its decision not to raise its rate, sending the yen close to the lowest level against the dollar since 1998.
Officials in Tokyo insist that low rates are still needed to nurture a struggling economy, though the BoJ did say it "was necessary to pay due attention to developments in financial and foreign exchange markets".
Asian stock markets mostly closed lower Friday after an overnight slump on Wall Street, while oil prices gained.
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Commentators remain unconvinced that Friday's rebound would be prolonged -- because they argue that further rate tightening is needed to bring down sky-high inflation.
"There is unlikely to be sustained relief from the sinking feeling that has hit financial markets this week, as worries rise that countries around the world won't avoid falling into the economic pit of recession," said Hargreaves Lansdown analyst Susannah Streeter.
"After the initial boost of optimism that the Federal Reserve was going to get a handle on inflation... concerns mounted that the price spiral was going to be an even harder nut to crack without fresh aggressive hikes."
Stock markets have been tumbling for months as traders contemplate the end of the era of cheap cash that had sent share prices to record or multi-year highs.
Inflation worldwide stands at levels not seen for decades owing in particular to surges in energy and food prices.
On Wall Street Thursday, the Dow ended below 30,000 points for the first time in more than a year and the S&P 500 is now at its lowest for 18 months.
Key figures at around 1130 GMT
London - FTSE 100: UP 0.8 percent at 7,102.33 points
Frankfurt - DAX: UP 1.0 percent at 13,167.75
Paris - CAC 40: UP 1.2 percent at 5,955.95
EURO STOXX 50: UP 1.3 percent at 3,472.20
Tokyo - Nikkei 225: DOWN 1.8 percent at 25,963.00 (close)
Hong Kong - Hang Seng Index: UP 1.1 percent at 21,075.00 (close)
Shanghai - Composite: UP 1.0 percent at 3,316.79 (close)
New York - Dow: DOWN 2.4 percent at 29,927.07 (close)
Euro/dollar: DOWN at $1.0519 from $1.0549 late Thursday
Pound/dollar: DOWN at $1.2291 from $1.2353
Euro/pound: UP at 85.61 pence from 85.41 pence
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Dollar/yen: UP at 134.71 yen from 132.21 yen
Brent North Sea crude: UP 0.5 percent at $120.39 per barrel
West Texas Intermediate: UP 0.7 percent at $118.42