Nikkei index soars more than 14 percent

The Nikkei 225 stock average soared 1,171.14 points, or 14.15 percent, to 9,447.57--a sharp reversal after the market plunged nearly 10 percent Friday and a staggering 24 percent last week, its worst week ever. Tuesday's result surpassed the previous record single-day rise of 13.2 percent on Oct. 2, 1990.

Because of a national holiday Monday, this was the first chance for investors in Japan to react to a raft of emergency measures by governments around the world to thaw frozen credit markets and bolster funding to banks.

"Investors were relieved by government moves to rescue the global financial system," said Kazuhiro Takahashi, general manager at Daiwa Securities SMBC Co. Ltd. "Since the opening, buying is spreading across the board."

Although Tokyo's financial giants managed to weather subprime-related losses relatively unscathed, investor confidence last week collapsed amid escalating fears of a global equity crisis and worldwide recession--a potentially disastrous development for Japan's export-driven economy.

As part of the Japanese measures to strengthen its own financial system, authorities on Tuesday relaxed regulations on companies buying up their own shares, a change that will help prevent takeovers and allow companies to stave off a nose-dive in their own issues.

Japan also promised to continue to protect people's insurance policies and savings accounts, and said it will consider capital injection into medium-size and small Japanese financial institutions.

But Nakagawa, who also said Japan is willing to inject capital into crumbling financial institutions around the world, allayed any public fears about the health of Japanese banks and other financials.

"Our nation's financial system is in sound health, and we have sufficient safety nets in place," he said, promising continued vigilance about any possible fallout from declining stock prices.

Major exporters such as automakers and consumer electronics firms made huge gains Tuesday, buoyed by the renewed market optimism well as a stronger dollar.