Japan’s Topix index pared losses as heavily sold shares in Hong Kong and Shanghai rebounded after China ramped up measures to stop an equity rout.
The Topix closed down just 0.2 percent at 1,579.89 in Tokyo, with volume 55 percent above the 30-day average. The Topix plunged as much as 3.6 percent before Chinese markets opened, driven down by a stronger yen following a Federal Reserve warning that China’s equity rout and the Greek debt crisis could damp economic growth. The Nikkei 225 Stock Average gained 0.6 percent to 19,855.50, erasing a drop of 3.2 percent.
“People began the day panic-selling,” said Seiichiro Iwamoto, who helps oversee the equivalent of $37 billion at Mizuho Asset Management Co. in Tokyo. “If there’s concern about liquidity, of course people are going to be surprised. It’s calming down now though.”
Toyota Motor Corp., the world’s biggest carmaker by market value, slid 0.4 percent, paring an earlier decline. Toshiba Corp. slumped 2.1 percent after a report it may sell assets following an accounting problem. Fast Retailing Co., operator of the Uniqlo brand, gained the most on the Nikkei 225.
The yen advanced against all 16 of its major peers Wednesday, surging more than 2 percent versus currencies from the pound to the Brazilian real amid demand for the safest assets. It slid 0.6 percent to 121.39 per dollar Thursday.
The Tokyo Stock Exchange Mothers Index of small-cap companies fell 0.9 percent, paring an earlier plunge of as much as 9.7 percent. The Jasdaq Stock Index, which comprises emerging companies, lost 1.4 percent.
The Topix’s intraday moves Thursday were the most extreme since Oct. 31 last year, when the Bank of Japan announced surprise additional monetary easing and the country’s $1.1 trillion pension fund said it would increase its investment in stocks. Some 3.8 trillion yen worth of shares exchanged hands on the Topix, 63 percent above the average for the past year.
“We’re seeing global risk-off moves,” Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. in Tokyo, said by phone. “U.S. stocks are falling, yields are declining, and I expect the yen to strengthen for some time. It all depends on China. Also Greece faces a deadline on the 12th, so we’ll have a wait-and-see feeling until then.”
E-mini futures on the Standard & Poor’s 500 Index added 0.6 percent after the underlying measure tumbled 1.7 percent to a four-month low in disrupted trading in New York on Wednesday.
Trading was suspended on the New York Stock Exchange as a computer malfunction shut the venue for 3 1/2 hours. Stocks continued to change hands on other U.S. venues.
Fed officials expressed concern over risks posed by China and Greece, according to the record of their last meeting. Almost all policy makers said they still need more evidence growth is strong as they mull the timeline for raising interest rates. Investors sought out haven plays amid speculation the selloff that had wiped out more than $3 trillion in Chinese equity value and paralyzed the market could spread to the economy. Greece extended its bank shutdown through Monday.
The rout that had seen Chinese shares slide more than 23 percent the past two weeks took on a new dimension Wednesday, with the Shanghai Composite Index sinking to its lowest level since March 17 and sellers locked out of about 72 percent of the market. At least 1,331 companies halted trading on mainland exchanges and a further 747 slumped by the 10 percent daily limit.
Shares in Hong Kong and mainland China rebounded Thursday after Beijing banned major stockholders from selling stakes in listed companies late Wednesday, the latest in a barrage of measures unveiled almost every night over the past 10 days as President Xi Jinping’s government grapples to stem the rout.
The latest moves are a sign of desperation and will fuel fear among investors, said Mark Mobius, executive chairman of the Templeton Emerging Markets Group.
Greece requested a three-year loan from the European Stability Mechanism after regional leaders set a Sunday deadline for the indebted nation to come up with a new set of reform proposals in exchange for more bailout aid. Capital controls were also extended, through Friday.
European stocks closed little changed as the Stoxx Europe 600 Index swung between gains and losses.
Toyota slid 0.4 percent, the second-biggest drag on the Topix. The Topix Land Transportation Index lost 1.5 percent to lead declines among the 33 industry groups on the broader gauge.
Toshiba fell 2.1 percent to close at its lowest level since May 2014. The company may sell assets worth 200 billion yen ($1.7 billion) amid an internal accounting probe that the company has said will lead to earnings writedowns, the Nikkei newspaper reported.
Fast Retailing jumped 4.1 percent, the most since October. Profits surged 52 percent in the nine months ending May as Uniqlo casual-wear sales grew in Japan, the retailer said after the market closed.