By Alex Richardson
SINGAPORE, March 17 (Reuters) - The yen surged to a record
high against the dollar, Japanese shares slid and stocks
elsewhere in Asia fell on Thursday after U.S. officials said the
risk of a catastrophic radiation leak from an
earthquake-crippled Japanese nuclear plant was rising.
The unfolding disaster in Japan has sent fear coursing
through markets, hammering shares and boosting safe-haven
government debt, as investors struggle to get a fix on the scale
of the crisis and the size of the economic hit it will deliver.
Operators of the Fukushima Daiichi nuclear complex, 240 km
(150 miles) north of Tokyo, said they would try again on
Thursday to use military helicopters to douse the plant's
overheating reactors.
"Fear is the only factor driving the market today and if you
look at news about temperatures rising, things exploding, you're
not going to trade calmly, right?" said Koichi Ogawa, chief
portfolio manager at Daiwa SB Investments.
The yen had risen 4 percent against the dollar on
Wednesday amid speculation Japanese insurers would have to
repatriate funds to pay for massive claims following Friday's
9.0 magnitude quake and the devastating tsunami it triggered.
That run-up set off a wave of stop-loss and options-related
selling that sent the currency as far as 76.25 to the dollar on
electronic trading platform EBS in increasingly
chaotic trading, before easing to around 79.30.
"It's mayhem out there," said one trader at an Australian
bank in Sydney. "The yen's been moving a big figure a second on
occasions. A lot of people are crying out for the central banks
to step in."
Japan's Finance Minister Yoshihiko Noda blamed speculation
for the spike in the yen and said he would closely watch market
action. Markets usually interpret such comments as a reminder
that the authorities could intervene to curb the currency.
STOCKS DOWN
Japan's Nikkei share average was down 2.5 percent,
with big exporters such as industrial robot maker Fanuc
and car maker Honda Motor taking the most points off
the index.
Japanese stocks had suffered their biggest two-day rout
since the 1987 crash on Monday and Tuesday before rebounding
nearly 6 percent on Wednesday.
Asian shares outside Japan were down 0.7
percent, with shares in South Korea off 0.7 percent.
Benchmark 10-year Japanese government bond futures
rose 0.08 point to 139.78, easing from a spike early in the
trading day that followed a surge in U.S. Treasuries the
previous day.
The CBOE Volatility Index or VIX , Wall Street's
favourite measure of investor fear, rose 20.89 percent to close
at 29.40 on Wednesday, its highest level since July 6. In the
last two days, the VIX is up nearly 40 percent.
Gold fell nearly $8 to $1,391.40 and oil prices eased
a little, with Brent crude at $110.18 a barrel and the
U.S. benchmark at $97.78, after rising 2 percent on
Wednesday on fears of disruption to Middle East supplies.
(Editing by Sanjeev Miglani)
