TOKYO -- Reports of an easing in Persian Gulf tensions and intervention by the government sent the stock market here exploding upward yesterday for its largest one-day gain, a 13.2 percent increase in the Nikkei average.
But stocks retreated a bit today, with the Nikkei down about 100 points, or less than five-tenths of 1 percent, near the close of trading.
Yesterday's euphoric surge, set off by an unexpected convergence of positive factors, including a big jump on Wall Street Monday, still left the market down for the year, and few said they expected the exaggerated, one-way movement to continue for long.
But it brought a welcome respite from a nine-month slump that had wiped out nearly half the value of the Japanese share market and had threatened the health of the banking system.
"The important thing was that finally investors were convinced that the market has a bottom," said Toshio Mori, executive vice president of Tokyo Securities Co. "It will still take a while for the market to stabilize, but it was an important day psychologically."
The Nikkei shot up Monday from the opening of trading and hardly stopped, soaring by 2,676.55 points to 22,898.41.
That brought the index only back to where it stood a week ago, however, when it was being battered by higher interest rates and by worries about war in the Middle East.
Yesterday's upswing, comparable to a rise of more than 300 points in the Dow Jones industrial average, was greater than the 9.3 percent rise after the stock market crashed in October 1987.
In addition, market-determined interest rates fell sharply, another plus for the Tokyo market. The yield on the Japanese government's benchmark 10-year bond tumbled to 8.245 percent from 8.54 percent, a record one-day move.
Market experts attributed the sudden flood of buy orders to three principal factors: a steep decline in oil prices, touched off by signs the Persian Gulf crisis might be resolved through diplomatic means; the agreement in the United States to lower the federal budget deficit, which sent shivers of hope through trading rooms from Wall Street to Tokyo of a decline in interest rates; and a new attitude expressed by Japan's finance minister Monday, in which he said the government would act to halt the market's earlier plunge.
"It was a complete change in tone by the government, after it ignored the markets for months," said Toyoharu Tsutsui, head of the equity department at CS First Boston. "That really gave a lot of impetus to things."
A sign of the urgency that had been felt here came Monday when the finance minister, Ryutaro Hashimoto, announced several symbolic market-bolstering measures.
He increased the amount investors could borrow against the value of their stock to buy new shares to 80 percent from 70 percent, and raised the limits on how much large institutions could invest in little-regulated special stock funds.
"What he announced was just symbols; it had no substantial impact by itself," said Kazuhiko Hama of Nomura Securities Co. "But it showed that he was not unaware of our situation, and that he would consider changing monetary policy if things in the market got too bad. It was psychological, but that's important."