NEW YORK: European and US stocks rebounded from three days of selling Thursday despite no resolution to Japan's nuclear plant crisis, while the yen edged off a record high against the US dollar. The yen's strength had markets speculating that Japanese investors would sell overseas assets to bring home funds to pay for reconstruction after Friday's earthquake and tsunami. The yen hit a record high against the dollar of 76.25 yen as Asian markets began trading. The Group of Seven finance leaders and central bankers planned to hold a conference call later Thursday. Currency traders have interpreted remarks by some officials as indicating other central banks may give Japan their blessing to intervene to drive the yen lower against the dollar. Developments at Japan's quake-hit nuclear plant were a source of high anxiety for investors. Japanese military helicopters dumped water and a water canon was used on an overheating nuclear reactor, but radiation levels at the plant remained high. “The absence of immediately worse news from Japan is interpreted by equity traders as a reason to stop selling and look for buying opportunities,” Jim Vogel, an interest rate strategist at FTN Financial in Memphis, Tennessee, said in a note to customers. The MSCI world equity index gained 1.2 percent after hitting a three-month low earlier in the week. The index has now erased all of this year's gains. Tokyo stocks ended down 1.4 percent Thursday. Earlier this week, Japanese stocks suffered their worst two-day selloff since 1987. The Thomson Reuters global stock index gained 0.7 percent. The FTSEurofirst 300 index rose 1.8 percent as a recent sell-off attracted bargain hunters. The Dow Jones industrial average rose 127.95 points, or 1.10 percent, to 11,741.25. The Standard & Poor's 500 Index increased 14.40 points, or 1.15 percent, to 1,271.28 and the Nasdaq Composite Index climbed 24.71 points, or 0.94 percent, to 2,641.53. The index known as Wall Street's fear gauge, the VIX,, fell 8 percent to 26.99 Thursday, a day after hitting its highest level since July. Many traders, however, said there were still reasons to be cautious as Japan had yet to contain its nuclear problem that could exacerbate the natural disaster's economic toll. “The drop has been violent, but the news flow remains very alarming,” said David Thebault, head of quantitative sales trading at Global Equities in Paris. “There is short covering at this point, and we continue to see outflows. “Stocks might look oversold on the short term, but they are not if we're heading into a bear market. The Japanese crisis could have severe consequences for the global economy,” he said. Emerging market stocks fell 0.6 percent. US crude oil rose 3.4 percent to $101.34 a barrel as unrest in Bahrain and Libya heightened concern about supply disruption while investors weighed the impact on energy demand from quake-hit Japan. The state-owned Bahrain Petroleum Co has partly shut down production due to staff shortages caused by political unrest in Bahrain, trade sources said. Bahrain arrested at least six opposition leaders, a day after its crackdown on protests by the opposition majority raised fears of a regional conflict. In New York, the yen traded at 79.07 per dollar, off the record high that traders feared could trigger intervention by the Bank of Japan.