BANGKOK, Thailand - Japanese stocks rebounded Wednesday, recovering some of the massive losses sustained over the last two days following a devastating earthquake and tsunami. Other Asian indexes also bounced back even as 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 per cent but 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 Nikkei was up 5.2 per cent to 9,053.17 as traders searched for bargains after a panic selling sent the index spiraling down nearly 11 per cent 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 per cent, 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 cash into Tokyo's money markets for a third day.
The Bank of Japan injected 3.5 trillion yen ($43 billion), following injections totalling 23 trillion yen ($283 billion) over the past two days. That helped banking shares perk up: Mitsubishi UFJ Financial Group, the country's biggest bank, was up 2.2 per cent, and Mizuho Financial Group Inc. gained 5.4 per cent.
Japan's powerhouse exporters also caught their breath after suffering staggering losses. Toyota Motor Corp., the world's No. 1 auto maker, rose 6.4 per cent, Sony Corp. shot up 7.5 per cent and truck-maker Isuzu Motors was 7.3 per cent higher.
Heavy industry shares rose as the shock of the disaster gave way to thoughts of rebuilding. Kobe Steel soared 11.3 per cent, and Nishimatsu Construction Co. Ltd. jumped 4.8 per cent 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 $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 per cent to 1,957.29 and Australia's S&P/ASX 200 rose 0.7 per cent 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.
Taiwan's TAIEX index recovered some lost ground -- up 1.1 per cent -- after losing 3.4 per cent Tuesday. But the index's near-term outlook remained shaky due 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.
The nuclear crisis overtook financial markets around the world Tuesday. The Dow Jones industrial average closed down 137.74 points, or 1.1 per cent, 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 per cent of U.S. exports.
In currencies, the dollar was up at 80.89 yen from 80.83 yen late Tuesday. The euro fell to $1.3976 from $1.40 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 per cent against the dollar in three months.
Benchmark crude for April delivery was up 1 cent at $97.19 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.
