Japanese shares rebound boosts markets

Japanese shares yesterday clawed back some of the dizzying falls sustained over the last week in the biggest one-day gain for the market seen for 18 months. The rebound dragged up Asian markets, while London jumped to within a few points of its all-time high on receding fears of an imminent rate rise.

A switchback session for Tokyo saw shares slip close to the psychologically important 17,000 level in early trading only to reverse that with a storming 1,100 point rise at one stage on short covering.

The Nikkei index eventually closed 815.14 points ahead, or 4.71 per cent, to 18,118.79, offsetting part of the 2,142.35 point fall over the previous four trading days.

Japanese investors, suffering from historically low interest rates, have fled to other markets for better returns on their money. On Friday alone, the index slid 770 points, the biggest drop since January 1995.

Keiko Kondo, a strategist at Merrill Lynch Japan, attributed the rebound to bottom-fishing. "Since last week's fall was so sharp, the index [at current levels] looked attractive and bargain-hunters emerged." But he cautioned that the market could again be hit by companies taking profits on shareholdings ahead of corporate book closings at the end of March.

Analysts called the rebound technical, however, and said it did not signal any major reversal of the bearish trend, adding that the market was still gripped by worries about the economy and the health of some financial institutions.

This analysis was at odds with the futures market, where March contracts briefly surged nearly 1,000 points before closing at 18,130, up 980 points.

Rumours that the government was preparing to step in to support share prices were quashed, but there was evidence of damage limitation. Shoichiro Toyoda, chairman of the powerful business lobby Keidanren, said: "Although there is not much confidence in the economy, I don't think the conditions at the moment are bad."

Asked about recent weakness in the stock market, Mr Toyoda said he was worried about the price falls, but added that movements in stock prices did not necessarily coincide with those in corporate earnings.

Meanwhile, the Prime Minister, Ryutaro Hashimoto, was reported as saying that Japan's economic policy should not be formed only by looking at current stock prices, while other government sources said they did not expect the economy to be hurt by the stock market's weakness.

The Tokyo bounce, coming on the back of Friday's rally on Wall Street, saw several European stock markets close at record highs yesterday. In London, the FTSE 100 index broke through the 4,100 level, ending 50.7 points ahead at 4,107.3, just short of the all-time high of 4,118.5 struck on New Year's Eve.

Wall Street rose further in morning trade, but the Dow was up only around 10 points as European markets closed. It ended on a new high, up 5.39 points at 6709.2.

Market Report, page 17

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Tax Manager / Accountant

£35 - £50k DOE: Guru Careers: A Tax Manager / Accountant (ACA / CA / CTA) is n...

Ashdown Group: Contracts Executive - City of London

£35000 - £37000 per annum + benefits: Ashdown Group: Contracts Executive - Cit...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree Group have been well esta...

Recruitment Genius: Call Centre Debt Collector - Multiple Roles

£21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Day In a Page

Giants Club: After wholesale butchery of Idi Amin's regime, Uganda’s giants flourish once again

Uganda's giants are flourishing once again

After the wholesale butchery of Idi Amin's regime, elephant populations are finally recovering
The London: After 350 years, the riddle of Britain's exploding fleet is finally solved

After 350 years, the riddle of Britain's exploding fleet is finally solved

Archaeologists will recover a crucial item from the wreck of the London which could help shed more light on what happened in the vessel's final seconds
Airbus has patented a jet that could fly from London to New York in one hour

Airbus has patented a jet that could fly from London to New York in one hour

The invention involves turbojets and ramjets - a type of jet engine - and a rocket motor
10 best sun creams for kids

10 best sun creams for kids

Protect delicate and sensitive skin with products specially formulated for little ones
Tate Sensorium: New exhibition at Tate Britain invites art lovers to taste, smell and hear art

Tate Sensorium

New exhibition at Tate Britain invites art lovers to taste, smell and hear art
Ashes 2015: Nice guy Steven Finn is making up for lost time – and quickly

Nice guy Finn is making up for lost time – and quickly

He was man-of-the-match in the third Test following his recall to the England side
Ashes 2015: Remember Ashton Agar? The No 11 that nearly toppled England

Remember Ashton Agar?

The No 11 that nearly toppled England
Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks