Japan's PM Abe defends policies as markets settle

TOKYO (AP) - Japan's top leaders are defending the economic strategies championed by Prime Minister Shinzo Abe, though the central bank chief acknowledged a need for better communication with financial markets, a day after Tokyo shares suffered their worst loss since the 2011 tsunami disaster.

Bank of Japan Governor Haruhiko Kuroda acknowledged Friday the need for careful handling of aggressive monetary policies aimed at breaking the world's third-largest economy free of deflation and for stronger "communication and dialogue" with financial markets.

But, Mr Abe and other officials said they will stick to the policies, which have brought unusual volatility to Japan's government bond market and contributed to the 7.3 percent drop in the benchmark Nikkei 225 stock index on Thursday.

The Nikkei had gained 1.2 percent by early afternoon Friday.