HONG KONG: Tokyo stocks led an Asian rebound Wednesday as dealers sought bargains after heavy selling over the past two days amid concerns of a nuclear meltdown in Japan following last week's earthquake.
The Nikkei surged after suffering its heaviest two-day sell-off for 24 years as crews struggled to prevent a catastrophe at the troubled Fukushima plant northeast of Tokyo.
And the Bank of Japan pumped 3.5 trillion yen ($43.3 billion) into the financial system, after offering eight trillion in same day funds Tuesday and a record 15 trillion Monday to soothe markets and ensure firms can access cash.
But sentiment was tempered by news of a fresh fire at the plant northeast of Tokyo and white clouds billowing from one of the reactors, while the government said it had temporarily evacuated all staff due to a spike in radiation.
The plant has already suffered four blasts and one other fire since it was rocked by Friday's record tremor.
Tokyo shares soared 5.68 percent, or 488.57 points, to 9,093.72 after diving 10.55 percent Tuesday -- their worst performance since the collapse of Lehman Brothers in late 2008 -- and 6.18 percent on Monday.
Exporters made big gains following heavy losses over the past two days due to the fact they had halted production in Japan following the 9.0-magnitude quake and consequent tsunami.
On Wednesday Toyota Motor was up 9.14 percent and Sony gained 8.78 percent and Nintendo jumped 6.16 percent.
However, Tokyo Electric Power, or TEPCO, the operator of the stricken nuclear power plant that lost around 25 percent on each of the previous two days, dived a further 24.57 percent.
The strong performance on the Nikkei spurred other regional markets, with Sydney gaining 0.65 percent, or 29.5 points, to end at 4,558.2.
Shanghai closed 1.19 percent, or 34.54 points, up at 2,930.80 while Hong Kong gained 0.10 percent, or 22.63 points, to end at 22,700.88.
Seoul jumped 1.77 percent, or 34.05 points, to 1,957.97.
"It appears that equity markets in the region have been hit so hard that they are oversold," said Macquarie Private Wealth division director Martin Lakos.
"But the markets are going to react to whatever news comes out of Japan. This is about risk aversion rather than fundamental values or the impact on global growth," he told Dow Jones Newswires.
Regional shares dived Tuesday on a wave of panic selling after Japan's Prime Minister Naoto Kan warned that radiation leaking from the Fukushima nuclear plant had reached levels that posed a threat to health.
However, a fresh fire Wednesday and fears that containment pools holding spent fuel rods at one of the reactors had started to heat up highlighted the precariousness of the situation.
On money markets the dollar bought 80.80 yen in early Wednesday trade compared with 80.78 yen a day before after the US Federal Reserve held interest rates. The euro traded at $1.3972 from $1.3996 on Tuesday.
The euro also slipped against the Japanese currency, buying 112.89 yen from 113.79 yen a day ago.
Oil was mixed, with New York's main contract, light sweet crude for delivery in April, rose 14 cents to $97.32 per barrel, after falling more than $4 in New York.
Brent North Sea crude for April dipped 22 cents to $108.30 in the afternoon following a loss of more than $5 late Tuesday.
Gold closed at $1,400.00-$1,401.00 an ounce in Hong Kong, down from Tuesday's close of $1,416.00-$1,417.00.
In other markets:
-- Taipei rose 1.09 percent, or 89.80 points, to 8,324.58.
Chunghwa Telecom was up 0.11 percent to Tw$88.2 while Hon Hai fell 3.21
percent to Tw$105.5.
-- Manila shed 0.46 percent, or 17.97 points, to 3,878.44.
Philippine Long Distance Telephone fell 4.2 percent to 2,070 pesos, Energy Development gained 0.3 percent to 6.20 and SM Investments was up 0.1 percent at 515.
-- Wellington gained 0.38 percent, or 12.66 points, to end at 3,326.80.
Telecom rose 0.8 percent to NZ$1.99.
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