Japanese stocks rebounded yesterday, recovering some of the massive losses sustained over the past two days following a devastating earthquake and tsunami. Other Asian indices also bounced back even as the human and economic toll from the disasters, including an escalating nuclear crisis, remained unclear.
The benchmark Nikkei 225 index briefly surged more than 6 percent, but softened slightly 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.
The Nikkei closed up 5.68 -percent to 9,093.72 as traders searched for bargains after panic selling sent the index spiraling down 10.55 percent the day before. The Nikkei on Tuesday closed at its lowest level in almost two years after shedding more than 1,600 points, or 16 percent, over two days.
Meanwhile, the Bank of Japan (BOJ) pumped cash into Tokyo’s money markets for a third day in a row, bringing its total liquidity injection to ￥55.6 trillion (US$688.3 billion) since Monday. That helped banking shares perk up: Mitsubishi UFJ Financial Group, the country’s biggest bank, was up 2.2 percent, and Mizuho Financial Group Inc gained 5.4 percent.
Japan’s powerhouse exporters also caught their breath after suffering staggering losses. Toyota Motor Corp, the world’s No. 1 auto maker, shot up 9.1 percent, Sony Corp rose 8.8 percent and truck-maker Isuzu Motors was 10.5 percent higher.
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.
“It is very early days for calculation of any impact on the economy and the stock and bond markets,” according to Sarah Williams, head of Japanese equities at London-based Threadneedle, which manages about US$65 billion in assets. “Until the safety of these plants is assured, investors will remain cautious.”
Markets elsewhere in the region advanced. South Korea’s KOSPI added 1.8 percent to 1,957.97 and Australia’s S&P/ASX 200 rose 0.7 percent to 4,558.20. Benchmarks in Taiwan, Singapore and New Zealand were also higher.
However, markets in Indonesia and the Philippines — which count on Japan for a relatively large share of their exports — were down.
Vietnam and Malaysia also slumped.
The TAIEX recovered some lost ground — up 1.09 percent — after losing 3.35 percent on Tuesday, but the index’s near-term outlook remained shaky owing to extensive trade ties between Taipei and Tokyo.
“Taiwan’s trade exposure to Japan is among the highest in the Asia region,” DBS Bank Ltd in Singapore said in a report.
In currencies, the US dollar was up at ￥80.94 from ￥80.83 late on Tuesday. The euro fell to US$1.3985 from US$1.40 late on Tuesday.
Benchmark crude for April delivery was up US$0.04 at US$97.58 a barrel in electronic trading on the New York Mercantile Exchange. The contract tumbled US$4 to US$97.18 on Tuesday as the prospect of falling oil demand from Japan sent crude prices down.