TOKYO, 6th August, 2024 (WAM) -- The Japanese government and the Bank of Japan will continue to monitor market developments with a sense of urgency and examine what is happening in a "cool-headed manner," its top currency diplomat said on Tuesday.
Atsushi Mimura, newly-appointed vice finance minister for international affairs, made the remarks after a meeting of senior officials from the Finance Ministry, the BOJ and the Financial Services Agency following big swings in both stock and currency markets, Kyodo News reported.
Mimura said currency moves should reflect fundamentals, adding that the outlook for Japan's economy had not changed.
Nikkei closes high
Meanwhile, the Nikkei stock index closed with its largest single-day point gain in history on Tuesday, soaring over 3,200 points as shares drew widespread buying after the previous day's record plunge.
The sharp rebound, also helped by a weaker yen, came after global stock markets plunged on Monday as U.S. recession fears grew due to a recent batch of disappointing economic data, prompting investors to seek safe-haven bonds.
The 225-issue Nikkei Stock Average ended up 3,217.04 points, or 10.23 percent, from Monday at 34,675.46, exceeding the previous day-on-day point gain record of 2,676.55 registered on 2nd October, 1990.
The broader Topix index finished 207.06 points, or 9.30 percent, higher at 2,434.21.
Every industry category on the top-tier Prime Market gained ground, led by marine transportation, rubber product and consumer credit shares.
Yen falls against dollar
The U.S. dollar briefly rose to the lower 146 yen range in Tokyo, after better-than-expected U.S. service sector data for July eased concerns about a recession and helped lift U.S. Treasury yields.
Stocks pared steep losses from the previous day's record 4,451.28 point decline, with the Nikkei soaring over 3,400 points at one point, as investors bought the dip on improved sentiment, analysts said.
"U.S. interest rates began to rise again after the Institute for Supply Management's services data came in better than expected, acting as a catalyst for Japanese stocks to rebound," said Koichi Fujishiro, senior economist at the Dai-ichi Life Research Institute.
The benchmark had lost more than 7,600 points over the past three trading days, following the Bank of Japan's decision last week to hike interest rates and concerns about a possible additional rate increase later this year.