Equities saw wild swings through the morning, with the benchmark Nikkei index finishing the session more than 2% higher, having been as much in the red after the open.

The yen has appreciated sharply since Japan’s central bank last week hiked interest rates for only the second time in 17 years – indicating plans for more if the economy performs as officials expect.

But in a speech on Wednesday morning, BOJ deputy governor Shinichi Uchida took a more dovish stance.

“I believe that the Bank needs to maintain monetary easing with the current policy interest rate for the time being, with developments in financial and capital markets at home and abroad being extremely volatile,” he said.

Uchida said that in recent days, “the yen has appreciated significantly against the US dollar, since large positions that had been built up on a weaker yen are being unwound”.

“Moreover, partly due to the correction of the yen’s depreciation, stock prices in Japan have declined to a greater extent than other economies,” he added.

After his speech, one dollar bought 146.69 yen, compared with 144.68 in New York.

The Nikkei finished the morning 2.28%, or 789.15 points, higher at 35,464.61, while the broader Topix index added 3.30%, or 80.31 points, to 2,514.52.

Investors were jittery after the Nikkei surged more than 10% on Tuesday, a day after tanking more than 12% on concerns about a possible US recession and the stronger yen.

“The market will likely remain nervous about the direction of the dollar-yen,” brokerage house Monex said.

Major shares reversed earlier losses to mark gains. Toyota rose 1.07% to 2,545 yen, semiconductor test-maker Advantest rose 1.09% to 6,205 yen and Nintendo added 2.02% to 7,659.