Chinese stocks rose and the yuan strengthened Friday, a respite from the early-year meltdown that wiped as much as $1.1 trillion from mainland markets, after authorities overnight removed a mechanism blamed for triggering more volatility.

The Shanghai Composite Index SHCOMP, +2.06% finished up 2% at 3,186.41, recovering from a 7% plunge Thursday. It finished down 10% for the week, its worst performance since the week ending Aug. 21.

Elsewhere, the Hang Seng Index HSI, +0.47% closed up 0.6%, and South Korea’s Kospi 180721, +0.25% rose 0.7%. But the Nikkei Stock Average NIK, +0.17% and the S&P/ASX 200 XJO, -0.31% both fell 0.4%.

The narrower gains and losses signal that markets are starting to stabilize after a global selloff yesterday. Futures for the S&P 500 were up 0.9%.

On Thursday, fears about China pushed the Dow Jones Industrial Average down nearly 400 points. Commodities also tumbled, including U.S.-traded oil and base metals like copper and nickel. The Stoxx Europe 600 SXXP, +0.17% fell 2.2% after declining as much as 3.6%.

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Analysts and traders attributed the gains in Asia Friday to building optimism about a steadying Chinese yuan and measures from Chinese authorities to quell volatility, including a suspension of a circuit breaker system that exacerbated selling earlier in the week and suspended trading on Monday and Thursday.

Analysts also attribute some of the gains to government buying.

“It’s not unfair to think the ‘National Team’ is in there to some extent,” said Bill Bowler, Hong Kong-based broker at Forsyth Barr Asia, referring to China’s state-owned funds tasked with buying shares.

Circuit breakers

Chinese markets were suspended from trading on Monday and Thursday, after a benchmark of blue chips fell by the 7% limit that triggers a new circuit breaker system, which went into effect on Jan. 1.

One problem with the circuit breaker is that the thresholds were set too low, analysts say. In the 60 trading days between June 8 and September 9 during China’s summer stock market rout, Chinese stock markets fluctuated up or down by 5% a dozen times, or every five trading days, according to research by Noah Holdings, a Chinese wealth manager.

Read: After China circuit-breaker move, now what?

Friday morning started out choppy, with Shanghai falling by more than 2% at one point. But the afternoon gains were broad, with the SSE 50, a benchmark of blue-chips, up 2.6% and startup stocks trading up 1.5% on China’s Nasdaq-like board.

Chinese stocks make a U-turn

China’s central bank guided the yuan stronger on Friday, helping to calm the markets. The Chinese currency had reached its lowest level in five years on Thursday.

The yuan CNYUSD, +0.10% was last at 6.6823 to the U.S. dollar in the offshore market where it trades freely, strengthening from a five-year low of 6.7511 Thursday. Its last trade yesterday was at 6.68.

Onshore, where the yuan can trade within 2% either side of the authorities’ guidance, the currency was last at 6.5883. That’s also stronger that the five-year low reached on Thursday of 6.5956.

Read: Here’s how China’s yuan drives the global selloff

Despite concerns about the Chinese regulator’s rapid flip-flop on the circuit breaker — suspending it just four days after it was launched — some applauded the move. “The decision to remove it was sensible,” said Andrew Xia, Hong Kong research director at Noah.

Others said the suspension of the circuit breaker may slow down losses but wouldn’t reverse the decline in Chinese equities in the coming months.

In Japan, shares traded near a three-month low, even as the Japanese yen weakened, typically a boon for stocks.

The yen USDJPY, -0.39% was last down 0.4% against the U.S. dollar, but it has risen 2% this week as investors seek havens. The currency’s strength weighs on Japanese exporters that repatriate earnings from overseas and pay costs at home.

In corporate news, shares Noble Group Ltd. SG:N21 plunged 7.3% after the commodities trader was hit with a second credit-rating downgrade. Standard & Poor’s Ratings Services late Thursday cut the embattled firm’s rating to junk status, presenting the latest blow for the first which has been battling to refute accusation of accounting irregularities for nearly a year amid a sharp commodities-market downturn. Shares are down 20% in the first four trading days this year alone.