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Japanese Stocks Rise Despite Brexit Market Uncertainty


People walk by an electronic board displays exchange rate of euro, left, and British pound at the securities firm in Tokyo, Monday, June 27, 2016.

People walk by an electronic board displays exchange rate of euro, left, and British pound at the securities firm in Tokyo, Monday, June 27, 2016.

Comments from the Japanese prime minister helped calm the Tokyo equity market Monday, although emerging markets in Asia came under pressure because of uncertainty surrounding Britain's vote last week to exit the European Union.

The benchmark Nikkei index in Tokyo closed the Monday session up 357 points, a gain of about 2.4 percent after a nearly eight percent plunge Friday following the outcome of the Brexit referendum.

“To the Bank of Japan I’d like to ask it to closely cooperate with central banks of other G7 countries to take necessary steps for the economy and financial markets,” said prime minister Shinzo Abe who added that he has instructed his finance minister, Taro Aso, “to watch the currency markets even more closely in cooperation with the Bank of Japan.”

There is much speculation Japan will break a vow to its G7 partners not to intervene in the currency market after the yen surged against the U.S. dollar in reaction to the EU referendum.

The Japanese currency has now strengthened more than 15 percent against the greenback since the beginning of the year, a trend that causes difficulties for Japan’s export-dependent and moribund economy because if makes Japanese products more expensive.

Japanese government officials and corporate executives met on Monday to share their concerns about the economic ramifications of the unprecedented referendum.

In an effort to reassure British and global investors, in his first public comments since Britain voted to quit the EU, Chancellor of the Exchequer (British finance minister) George Osborne said the government had put into place contingency plans for the possibility of a "leave" outcome.

“Our economy is about as strong as it could be to confront the challenge our country now faces,” Osborne told reporters.

Investors across the world are also worried that the British move could trigger an eventual disintegration of the European Union and that has brought the euro under further selling pressure on the currency market.

FILE - A pedestrian shelters from the rain beneath a Union Jack-themed umbrella near the Big Ben clock face and the Elizabeth Tower at the Houses of Parliament in central London, following the pro-Brexit result of the UK's EU referendum vote, June 25, 2016.

FILE - A pedestrian shelters from the rain beneath a Union Jack-themed umbrella near the Big Ben clock face and the Elizabeth Tower at the Houses of Parliament in central London, following the pro-Brexit result of the UK's EU referendum vote, June 25, 2016.

A weaker euro Monday helped push China’s yuan to its weakest level against the dollar since December 2010.

One of the few encouraging notes, however, came from Credit Suisse which noted buying opportunities in China’s equities markets amid the turmoil.

Overall, however, the mood among Asian investors Monday continued to be very cautious. That has helped to keep gold prices firm although the precious metal is trading slightly off the high of $1,335 an ounce it hit on Friday.

The 20-year Japanese government bond was another refuge for wary investors who helped send the note to a record low of under 0.09 percent.

Oil prices Monday extended the steep drop seen Friday with analysts pointing to additional concern about a growing glut in Asia of refined products.

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