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Asian shares see another day of gains on Wednesday
(MENAFN) Asian stocks experienced another day of gains on Wednesday, recovering from earlier volatility as stability began to return to the markets. Despite the overall positive movement, Tokyo's stock market continued to exhibit significant fluctuations, and the yen weakened further. Analysts have cautioned that additional market upheavals might be forthcoming.
Following a dramatic drop on Monday that led to a substantial reduction in global valuations, traders returned to the markets on Tuesday, seizing opportunities to buy at lower prices. The Nikkei, Japan's benchmark index, rebounded strongly, recovering from a 12.4 percent loss to achieve a gain of over 10 percent. This rebound extended to Wall Street, where some analysts suggested that the earlier sell-off might have been excessive.
The rally in Asia continued, bolstered by comments from Bank of Japan Deputy Governor Shinichi Uchida. In a speech, Uchida aimed to alleviate market concerns by affirming that the central bank would maintain its ultra-loose monetary policies amid ongoing market volatility. He emphasized that the current policy stance would remain in place while domestic and international financial markets remain unstable.
Uchida also noted that recent movements in the yen had been significant, with the currency appreciating against the US dollar as previously established positions betting on a weaker yen were unwound. He pointed out that, as a result of this adjustment and the yen's depreciation correction, Japanese stock prices had been more adversely affected compared to other economies.
The market turbulence had been triggered by a disappointing US jobs report released on Friday, which indicated that job creation in July fell short of expectations and heightened recession fears. This report followed the Federal Reserve's hint at a potential interest rate cut in September, occurring shortly after the Bank of Japan had raised rates for the second time in 17 years, creating additional stress in financial markets.
Following a dramatic drop on Monday that led to a substantial reduction in global valuations, traders returned to the markets on Tuesday, seizing opportunities to buy at lower prices. The Nikkei, Japan's benchmark index, rebounded strongly, recovering from a 12.4 percent loss to achieve a gain of over 10 percent. This rebound extended to Wall Street, where some analysts suggested that the earlier sell-off might have been excessive.
The rally in Asia continued, bolstered by comments from Bank of Japan Deputy Governor Shinichi Uchida. In a speech, Uchida aimed to alleviate market concerns by affirming that the central bank would maintain its ultra-loose monetary policies amid ongoing market volatility. He emphasized that the current policy stance would remain in place while domestic and international financial markets remain unstable.
Uchida also noted that recent movements in the yen had been significant, with the currency appreciating against the US dollar as previously established positions betting on a weaker yen were unwound. He pointed out that, as a result of this adjustment and the yen's depreciation correction, Japanese stock prices had been more adversely affected compared to other economies.
The market turbulence had been triggered by a disappointing US jobs report released on Friday, which indicated that job creation in July fell short of expectations and heightened recession fears. This report followed the Federal Reserve's hint at a potential interest rate cut in September, occurring shortly after the Bank of Japan had raised rates for the second time in 17 years, creating additional stress in financial markets.
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