Tokyo stocks surge more than 10% after record fall

Tokyo stocks surge 10% after record fall

Tokyo stocks surged more than 10 percent Tuesday, bouncing back from a record selloff the previous day on worries over the US economy and a stronger yen.

The benchmark Nikkei 225 index jumped 10.33 percent, or 3,249.36 points, to 34,707.78, while the broader Topix index added 10.26 percent, or 228.49 points, to 2,455.64.

On Monday, the Nikkei had closed down 12.40 percent, or 4,451.28 points -- the largest points drop in its history.

"The market is seen starting sharply higher, as it should perform a natural rebound after yesterday's plunge while dollar-yen moves towards the yen's depreciation," Monex said.

The brokerage said it expected nervous trade to continue with a focus on forex movements.

Nomura Securities added that the market would likely remain highly volatile this week.

"Today's gain can be explained in one phrase: a technical rebound" after the sharp fall, it said.

The yen weakened sharply to 146.01 against the dollar during morning trade, having surged on Monday to 141.70, a level not seen since early January.

A stronger yen is a negative for Japanese exporters, and recent rallies were fuelled by central bank policy decisions that reversed months-long trends.

The Bank of Japan last week raised interest rates for the second time in 17 years, with talk of another rate hike to come, while the US Federal Reserve has hinted at a cut as soon as September.

Among major shares in Tokyo on Tuesday, Honda roared 14.90 percent to 1,438 yen following a report that it was expected to announce a record quarterly profit.

Toyota jumped 10.51 percent to 2,466.5 yen, Sony Group advanced 7.44 percent to 12,125 yen and Nintendo added 9.87 percent to 7,259 yen.

Semiconductor shares were also sharply higher, with Tokyo Electron adding 12.26 percent to 24,760 yen and Advantest up 9.11 percent at 5,797 yen.