While the clamour has been for the US Federal Reserve to step in and quell the turmoil that washed across global markets on Monday, much of the thanks for their subsequent recovery must instead go to the Bank of Japan.

Asian, European and American markets have today recovered substantial proportions of losses suffered earlier this week after the BoJ unexpectedly turned cautious on further interest rate hikes, which triggered a sharp fall in the value of the yen. The Japanese currency is under close scrutiny because its rapid appreciation in value following a rate hike last week has been blamed, in part, for financial turbulence as its rally forced investors to unwind so-called "carry trades" in which they borrow cheaply in yen to invest in higher-performing assets elsewhere.

In a speech to business leaders earlier today, the BoJ's influential deputy governor said the central bank will not hike interest rates when markets are unstable. 

READ MORE: Global market meltdown doesn't justify emergency US interest rate cut

"As we're seeing sharp volatility in domestic and overseas financial markets, it's necessary to maintain current levels of monetary easing for the time being," said Shinichi Uchida, a career central banker seen as a mastermind of BoJ policy.

Speaking at a press conference afterwards, he added: "Personally, I see more factors popping up that require us being cautious about raising interest rates."

Weaker than expected jobs and manufacturing data out of the US has sparked concerns that the world's biggest economy could be headed for recession. This was the prima facie trigger for the meltdown at the start of this week, leading to calls for an emergency rate cut by the Federal Reserve.

READ MORE: Bank of Japan raises key interest rate to halt yen’s slide against the dollar

But fears that the Fed is "behind the curve" by keeping interest rates too high for too long are exaggerated.

The poor manufacturing and employment data from the US were skewed by a number of one-off factors including weather-related impacts from Hurricane Beryl and the shutdown of the auto industry by a cyber attack. Further evidence is required to confirm that any slowdown is the start of a new trend.

In any event, US interest rates will almost certainly be coming down after the Fed's next meeting in September. Until then, nerves will remain on edge with further key data due out next week.