By 1500 GMT the rand had gained 0.51 percent to 12.3065 per dollar, losing some of the momentum that saw the unit recover more than 1 percent to a session high of 12.2445, keeping the rand near its weakest levels since 2002.
The currency also firmed against the euro and the pound sterling, gaining 1.5 percent and 1.1 percent respectively by 1500 GMT.
“Some traders are opting to lock-in some profits following the exceptionally strong losses in the past couple of days,” said Jana van Deventer, an economist at ETM Analytics.
However, the currency along with domestic fixed income assets are expected to remain on the backfoot, with some market participants pricing in a psychologically significant move to the 13.000 mark and a further uptick in bond yields.
Government bonds tracked the firmer rand in the session, with yields falling on the day. The benchmark instrument due in 2026 shedding 7.5 basis points to 7.9 percent.
“Today we saw the first bit of respite in the bonds even though the rand is still quite weak. It was really overdone,” said Alexa Nicolau, a fixed income specialist at Rand Merchant Bank.
Rand weakness was likely to be short-lived, Nicolau warned, saying that if the unit weakened all the way to 13.00 mark, this could force South Africa’s central bank to act at its next monetary policy meeting in two weeks time.
“What the market is pricing in at the moment is a nearly 50 percent chance of a hike at the next meeting,” Nicolau said.
The South African Reserve Bank kept benchmark lending rates unchanged at 5.75 percent at its last policy meeting in January.
The dollar is expected to continue exerting heavy pressure on currencies across emerging markets. The Reuters index measuring a basket of EM currencies against the dollar showed they had softened by over a quarter of a percent on Wednesday.