TOKYO, March 15 (Reuters) – Japanese banking stocks closed higher on Wednesday, helping the Nikkei share average snap a three-day losing streak, as markets recovered some composure after investors tempered their fears of contagion from the Silicon Valley Bank meltdown.
The Tokyo Stock Exchange’s banking index rose 3.3%, led by regional lenders including Suruga Bank and Shimane Bank, which climbed more than 5% each.
The Nikkei had a volatile session, but recovered in the final 15 minutes of trade to close steady at 27,229.48. Over the previous three days, the benchmark had slumped nearly 5%.
The broader Topix, which is more influenced by banking shares, gained 0.7% to 1,960.12.
“For the time being, calm has returned to the market, but the SVB problem still needs to be monitored closely – that seems to be the feeling among investors,” said Kazuo Kamitani, a strategist at Nomura Securities.
Kamitani also pointed to looming US retail sales data and the Federal Reserve’s rate-setting meeting next week as reasons not to chase stock prices higher.
“Ultimately, the market is still cautious,” he said.
The TSE’s banking index had plunged almost 16% over the previous three sessions. But it had started from an elevated position, touching a more than seven-year high on Thursday amid growing conviction that the Bank of Japan would soon let up on the yield curve controls that have crushed profits from lending.
Japanese officials reiterated assurances on the health of the financial sector on Wednesday, with Finance Minister Shunichi Suzuki telling the parliament that a similar crisis to SVB won’t happen in the country.
Notable drags on the Nikkei included startup investor SoftBank Group, which fell 1.4%, and Uniqlo store operator Fast Retailing, which slide 1.7%.
(Reporting by Kevin Buckland; Editing by Rashmi Aich and Sherry Jacob-Phillips)
This article originally appeared on reuters.com