Tokyo Markets to Stay Open, Despite Calls for a Halt

Despite pleading from foreign banks, the Tokyo Stock Exchange and Financial Services Agency reportedly plan to keep the Japanese stock market open even as the fallout from last week’s earthquake continues to cause turbulence in the marketplace.

According to Reuters, which cited Japan’s Nikkei newspaper, officials in Japan intend to keep the stock markets open even after some foreign financial institutions had called for a trading halt. There were unconfirmed rumors earlier this week of a possible halt.

“I believe that the Tokyo Stock Exchange in its role as an important social infrastructure should continue to provide opportunities for stock trading. I would appreciate it if all investors and trading participants would respond in a calm and orderly manner,” Atsushi Saito, CEO of Tokyo Stock Exchange Group, wrote in a release on Tuesday.

It’s not clear which financial institutions requested regulators shut down the markets. The staffs of Morgan Stanley (NYSE:MS) BNP Paribas and Standard Chartered have left Japan, Reuters reported, citing industry sources. Private jet operators have reported a surge in demand for evacuation flights and prices have soared by as much as 25%, the wire service reported.

The uncertainty left in the wake of last week’s 9.0 earthquake and this week’s growing nuclear crisis has wreaked havoc in the financial markets, causing the benchmark Nikkei 225 to plummet 10.6% on Tuesday alone. Some $620 billion evaporated from the Japanese market during the first two days of this week as stocks took their biggest two-day plunge since 1987.

Saito said he believes "Japan's experience, knowledge and technologies in the area of recovering from earthquakes should not be underestimated and that the stock market will calm down soon."

While Japanese stocks bounced back on Tuesday -- the Nikkei leaped nearly 6% -- the markets remain jittery. Nikkei futures tumbled by more than 6% on Wednesday afternoon as U.S. and European energy officials sounded alarm bells about the extent of the crisis at the Fukishima nuclear facility.

U.S. markets have largely taken their cues from the Japanese markets, with the broad S&P 500 closely tracking the action in the Nikkei futures. After Tuesday’s epic selloff in Asia, the Dow Jones Industrial Average slid 1.15% on Wednesday to its lowest level since January 28.