Japanese stocks bounce back

Japanese stocks rebounded today, recovering some of the massive losses sustained over the last two days following the devastating earthquake and tsunami.

Japanese stocks rebounded today, recovering some of the massive losses sustained over the last two days following the devastating earthquake and tsunami.

Other Asian indexes also bounced back even though the human and economic toll from the disasters, including an escalating nuclear crisis, remained unclear.

Oil prices hovered above $97 a barrel after big losses overnight. In currencies, the dollar was up against the yen and the euro.

The benchmark Nikkei 225 index briefly surged more than 6% but softened slightly after Japan suspended operations to prevent the stricken Fukushima Dai-ichi 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 5.7% to 9,093.72 as traders searched for bargains after panic selling sent the index spiralling down nearly 11% the day before. Yesterday, the Nikkei closed at its lowest level in almost two years after shedding more than 1,600 points, or 16%, over two days.

The plunge prompted Tokyo Stock Exchange president Atsushi Saito to release a statement calling for calm. He noted that foreign investors were net buyers over the last two days.

"I also believe that Japan's experience, knowledge and technologies in the area of recovering from earthquakes should not be under-estimated and that the stock market will calm down soon," he said.

Meanwhile, the Bank of Japan pumped cash into Tokyo's money markets for a third day in a row, bringing its total liquidity injection to 55.6 trillion yen (€566bn) since Monday.

That helped banking shares perk up - Mitsubishi UFJ Financial Group, the country's biggest bank, was up 2.2%, and Mizuho Financial Group gained 5.4%.

Japan's powerhouse exporters also caught their breath after suffering staggering losses. Toyota, the world's biggest car maker, shot up 9.1%, Sony rose 8.8% and truck-maker Isuzu was 10.5% higher.

Heavy industry shares rose as the shock of the disaster gave way to thoughts of rebuilding. Kobe Steel soared 15%, and Nishimatsu Construction jumped 5.8% higher.

Nevertheless, investors still kept a close watch on a rapidly changing crisis at the crippled Fukushima plant. Authorities were still struggling to control the situation after a string of explosions and fires, as well as a burst of radiation.

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