Japan shares surge, central bank adds further $43B
Tuesday, March 15, 2011; 11:44 PM
TOKYO -- Japanese stocks rebounded Wednesday, recovering some of the massive losses sustained the last two days following a devastating earthquake and tsunami. Other Asian indexes also bounced back even as the economic toll from the disasters, including an escalating nuclear crisis, remained unclear.
The benchmark Nikkei 225 index temporarily surged more than 6 percent but then softened after Japan suspended operations to prevent a stricken nuclear plant from melting down after a surge in radiation made it too dangerous for workers to remain at the facility. By early afternoon, the index was up 4.2 percent to 8,966.17.
On Tuesday, the Nikkei closed at its lowest level in almost two years after shedding more than 1,600 points, or 16 percent, over two days.
The plunge prompted Tokyo Stock Exchange President Atsushi Saito to release a statement late Tuesday calling for calm. He noted that foreign investors were net buyers the last two days.
"I also believe that Japan's experience, knowledge and technologies in the area of recovering from earthquakes should not be underestimated and that the stock market will calm down soon," Saito said.
Meanwhile, the central bank pumped money into financial markets for a third day. The Bank of Japan injected 3.5 trillion yen ($43 billion), following injections totaling 23 trillion yen ($283 billion) over the past two days.
Among the major gainers were Japan's big exporters. Toyota Motor Corp. rose 6.9 percent, and Sony Corp. shot up 9.3 percent.
Still, investors still kept a close watch on a rapidly changing crisis at a crippled nuclear power plant in northeast Japan. Authorities were still struggling to control the situation at the Fukushima Dai-ichi plant after a string of explosions and fires, as well as a burst of radiation.
Markets elsewhere in the region advanced. South Korea's Kospi added 1.2 percent to 1,948.72, and Australia's S&P/ASX 200 rose 0.6 percent to 4,555.20. Benchmarks in Taiwan, Singapore and New Zealand were also higher.
The nuclear crisis overtook financial markets around the world Tuesday. The Dow Jones industrial average closed down 137.74 points, or 1.1 percent, at 11,855.42. The broader S&P fell 14.52 points to 1,281.87.
Investors sold stocks primarily because of fear that the disaster in Japan would slow down the global economy. Japan is the world's third-largest economy, manufacturing goods from computer chips to automobiles, and buys 10 percent of U.S. exports.
In currencies, the dollar was nearly unchanged at 80.86 yen from 80.83 yen late Tuesday.
The dollar had fallen against the Japanese currency in the aftermath of the earthquake as investors bet that Japanese investors would close down overseas bets and bring their money home.
Demand for the yen may keep up as Japan seeks to fund the country's rebuilding. After a huge Japanese earthquake in 1995, the yen gained about 20 percent against the dollar in three months.
Benchmark crude for April delivery was down 70 cents at $96.49 a barrel in electronic trading on the New York Mercantile Exchange. The contract tumbled $4 to $97.18 on Tuesday as the prospect of falling oil demand from Japan sent crude prices down.