Stock markets put in modest gains on Tuesday after a heavy session of losses the previous day, though the respite from worries over U.S. and European government debt looked only temporary.
Wall Street also looked set to open higher.
Spain's Treasury paid the highest yields in 14 years to issue short-term bills, suggesting an emphatic election victory for the centre-right People's Party on Sunday has done little to soothe investor nerves.
The average yield on the 3-month T-bill more than doubled to 5.11 percent from 2.292 percent one month earlier. The 6-month T-bill saw yields jump to 5.227 percent from 3.302 percent.
World stocks as measured by MSCI were up a third of a percent. The pan-European FTSEurofirst 300. gained a half a percent after a 3.3 percent loss on Monday.
It was viewed as a rebound from losses rather than any major turning point.
"This does not look like any weakness that one could buy into with a high degree of confidence," said Jeremy Batstone-Carr, strategist at Charles Stanley.
Earlier, Japan's Nikkei fell to an 8-month low before recovering somewhat to close down 0.4 percent
Investors are rattled by the continuing stress on euro zone debt markets, but also by the apparent inability of U.S. officials to come to grips with debt in their own economy.
A bipartisan U.S. deficit-reduction committee admitted defeat on Monday and abandoned a three-month effort to find $1.2 trillion in budget cuts.
All three major ratings agencies confirmed they were holding off taking immediate action on the U.S. rating, although Fitch said it could cut its outlook from stable.
Yields on peripheral euro zone debt climbed, with Italy's 10-year bond above 6.7 percent but below the plus-7 percent that triggers fears a bailout will be needed.
Jefferies Group Inc became the latest bank to cut its exposure to the debt of Europe's struggling states, saying late on Monday it had reduced gross exposure to debt of Greece, Ireland, Italy, Portugal and Spain by a total of nearly 75 percent since worries first surfaced in early November.
Such cuts help explain the rising yields, which go up when demand falls.
On foreign exchanges, the euro was slightly higher against the dollar although severe dollar funding strains are supporting the U.S. currency as European banks scramble to secure cash dollars.
"There is no fundamental change in the markets' risk averse mood. There's been no clear progress in the euro zone," said Koji Fukaya, chief FX strategist at Credit Suisse.