TOKYO: Japan’s Nikkei share average closed at a three-week high on Thursday, recovering from the index’s sharpest drop in 37 years hit earlier this month, but caution ahead of remarks from central bank heads in Japan and the US capped gains.

The Nikkei rose 0.68% to 38,211.01, its highest close since Aug. 1.

“The market was cautious ahead of the remarks by the Bank of Japan Governor (Kazuo) Ueda as well as Federal Reserve Chair (Jerome) Powell later this week,” said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.

“Also, with the Nikkei recovering to this level, some players wanted to sell stocks at a rally.” The Nikkei plunged 12.4% on Aug. 5 in its biggest decline since the 1987 Black Monday crash but bounced back 10% the following day.

The index is still below its July peak above 42,000 but has risen 23% from its Aug. 5 low.

Foreign investors exited Japanese cash equities worth 47.9 billion yen ($329.78 million) in the week ended Aug. 17, after about 521.9 billion worth of net purchases in the prior week.