Tokyo stock market remains volatile; BOJ official’s comments on easing financial controls lead to purchasing power

Tokyo’s stock market saw wild swings on Wednesday, with the benchmark Nikkei 225 index closing at 35,089.62, up 414.16 from Tuesday’s close. The index fell more than 900 points in early trading but later rose more than 1,100 points at one point as investors began buying back stocks that had fallen in value.

Although all major stock indexes rose on the U.S. stock exchange the previous day, some semiconductor-related stocks were sold off on the Tokyo market, partly because of the sharp decline in some high-tech stocks on the U.S. market. Export-related stocks, such as autos and machinery, also fell in value because of the stronger yen.

On the other hand, shares of trading companies and banks rose as investors bought back stocks that had fallen in value on Monday.

A speech by Bank of Japan Vice Governor Shinichi Uchida on Wednesday morning also added to the stock purchases. “For the time being, monetary easing should be firmly maintained at the current level,” Uchida said.

An official at a major securities firm said: “The market is likely to remain volatile, although this is supported by a trend of stock hunting [of companies] with good financial overviews.”