TOKYO -- The Tokyo Stock Exchange reacted to war in the Persian Gulf with a leap of more than 4 percent today as Prime Minister Toshiki Kaifu declared Japan's "firm support" of the effort to drive Iraq out of Kuwait.
The single-day gain of 1,004.11 yen in the 225-stock Nikkei index more than wiped out a big war-jitters loss of 770.53 yen yesterday after the United Nations deadline for Iraq's withdrawal from Kuwait, midnight Tuesday EST, had passed.
Because of time differences, Tokyo was the first major world financial center to open after the news that war had begun. Markets here opened about the time White House spokesman Marlin Fitzwater was telling reporters that "the liberation of Kuwait has begun."
The Tokyo exchange first dropped sharply in response to the announcement, then began a rapid recovery that lasted the entire morning session once it became clear that there was no sign of panic selling.
The yen also gained against the dollar all day, and was nearly 2 yen stronger than its Wednesday closer by 3 p.m.
Both market movements were contrary to what had long been predicted for the first day after the outbreak of war, but stock and currency traders were widely quoted in Tokyo this morning as saying that the long weeks of tense waiting had apparently led the markets to take the war into account before it actually came.
"Anything decisive seems to have come as a relief," a U.S. stock analyst based in Tokyo said as the Tokyo exchange's morning session was closing.
Mr. Kaifu went on television two hours after Mr. Fitzwater's announcement to read a statement in which he said Japan "strongly condemns this outrageous act of Iraq" in refusing to leave Kuwait and "deeply regrets that the efforts of the international community to find a peaceful solution to the crisis have been brought to nothing."
He said he will personally head a Cabinet task force on the crisis for the duration of the war.
He said Japan "is determined to extend maximum possible support, in accordance with the U.N. Security Council resolutions, to the actions by the countries concerned to restore international peace and stability."
Japanese newspapers have reported for several days that Mr. Kaifu's Cabinet has decided not to wait for a formal U.S. request before providing new aid.