J apanese shares soared in early trading on Tuesday, regaining some of the significant losses from the previous day and contributing to a regional rally.
The Nikkei 225 was up about 11%, while South Korea’s Kospi rebounded by 4.2%, and Hong Kong’s Hang Seng Index rose 1%. All these indexes had experienced major losses in the previous trading session.
On Monday, the Nikkei closed down 12.4%, marking its largest one-day fall since October 1987, with a record point drop of 4,451. This plunge triggered a global market rout, affecting all major Asian, European, and US markets.
Three major fears contributed to the market turmoil on Monday:
- Recession Concerns: Growing worries about a recession in the US economy spooked investors.
- Yen Carry Trades: The rapid unwinding of popular yen carry trades added to the volatility.
- Yen Surge: The Bank of Japan’s recent hawkish signals caused the yen to surge, hitting a seven-month high against the US dollar at around 143. The yen pulled back slightly on Tuesday, down 0.8% to 145.
This is a developing story and will be updated as more information becomes available.
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