FRANKFURT (dpa-AFX) - Reassuring statements by the Japanese central bank and a continued recovery on the US stock markets catapulted the Dax back above the 17,600 mark on Wednesday.

In the end, the leading German index ended the day up 1.50 percent at 17,615.15 points, making up for the first small part of its heavy losses following the recent turbulence on the stock markets. The MDax of medium-sized companies rose by 0.64 percent to 24233.38 points at midweek. Gains were also recorded across Europe.

Sentiment had already gradually calmed down the previous day after share prices around the world had slumped since the beginning of August. Recession worries in the USA and fears of a new Middle East war, among other things, had put pressure on shares.

Due to the yen's long period of weakness, many market participants had borrowed money in Japan, a country with low interest rates, and invested it in high-interest countries such as the USA. When the Japanese central bank unexpectedly raised interest rates further at the end of the month after an initial key rate hike at the beginning of July and the yen subsequently rose significantly, this speculation increasingly went in the wrong direction. Positions had to be closed out en masse, resulting in a strong wave of selling on the financial markets. The Japanese central bank has now calmed the markets by assuring them that it does not intend to take any further interest rate steps for the time being.

"After Monday's sell-off, global equity markets are now calm and stable," wrote Pierre Veyret, technical analyst at trading firm Activtrades. Investors are still cautious, but the fact that the main European indices have been able to hold on to their recent gains is seen as a positive sign. According to Veyret, the increase in volatility recorded at the beginning of the week is increasingly being seen as a technical correction. Such a correction is not unusual in the traditionally low-volume summer period, especially after months of stability and low market volatility./ck/he