The rand suffered heavy losses in New York as Japanese investors liquidated riskier overseas assets to channel funds back home to pay for reconstruction after last week's earthquake.

Japanese funds hold around $1.2 billion in South African bonds. Since the earthquake and tsunami struck on Friday, the rand has dropped nearly 10 percent against the yen to its lowest since May 2009.

Dealers expect a volatile session as investors react to developments at a stricken Japanese nuclear plant and more political turmoil in north Africa and the Middle East.

The rand has traded in a 12 cent range in the session so far, weakening to 7.20 then bouncing back to 7.08 to the dollar. It closed at 7.19 in New York.

"The market is not very liquid. There is not a lot of conviction of where the markets should trade. There has been some rand/yen selling where people are repatriating back into yen," said Garth Klintworth, head of fixed income commodities and currencies at Absa Capital.

"The market is in an incredibly nervous place at the moment. No one really understands where the safe haven is and where the risks really lie so I think we are going to see some knee jerk price reaction based on headlines," he said.

Government bonds weakened slightly and the yield on the shorter-dated 2015 bond rose 2.5 basis points to 7.87 percent and that on the 2026 note went up 1.5 basis points to 8.955 percent.  The JSE's blue-chip March stock futures contract was up 1.07 percent, pointing to strong start for the local bourse, which rose for the first time in three days on Wednesday.