Japanese Stock Market Rebounds Sharply After Record Dip

Japanese stocks saw a major rebound on Tuesday, recovering most of Monday’s severe losses attributed to global recession fears and equity valuation concerns. The Nikkei surged by 8%, lifting other Asian markets, amid reassurances from Japanese officials and a scheduled emergency meeting to address market conditions.

Japanese stocks rebounded sharply on Tuesday, recovering most of the severe double-digit losses from the previous day, as comments from the U.S. Federal Reserve and data alleviated investor concerns over recession and equity valuations. The Nikkei's rally followed the market's biggest single-day rout since the 1987 Black Monday sell-off, aided by the yen reversing its gains, indicating an easing of the carnage in yen-funded global carry trades.

In a turbulent trading day, the Nikkei was up 8% at 33,975.53 by 0516 GMT, after plunging 12.4% on Monday. The index was last up 2,623.1 points, having earlier jumped more than 3,000 points, surpassing its largest intraday points gain on record. The broader Topix climbed 7.5% to 2,394.33.

Investors were initially shaken by last week's global stock market plunge, U.S. recession risks, and the unwinding of investments funded by a cheap yen, triggering Monday's sell-off in Japanese equities. Traders appear to have reconsidered the severity of their response, buying back shares on the dip. Japanese officials, including Prime Minister Fumio Kishida, urged caution, while an emergency trilateral meeting between financial authorities was scheduled to discuss market conditions.

(With inputs from agencies.)