Japanese stocks rebounded on Tuesday after Monday’s plunge that shocked global financial markets.
The Nikkei 225 stock index surged 10.23%, or 3,217 points, its biggest point gain ever, following a plunge of more than 12% the previous day.
Tokyo markets plunged on Monday as the Bank of Japan raised interest rates for the second time in 17 years, sending the yen soaring against the dollar, making Japanese stocks and exports more expensive for foreign investors and buyers.
Stocks in major countries, including the U.S., the U.K. and Europe, also fell on Monday. Because of concerns that the U.S. economy is headed toward a recession.
Jesper Cole, managing director of Monex Group Japan, said he remains confident in Japanese stocks despite Monday’s big selloff.
“Japan’s fundamentals are strong, there is no risk of recession and corporate leaders are fully committed to increasing capital returns,” he told the BBC.
South Korean stocks also recovered slightly on Tuesday. The Kospi stock index rose 3.5% after falling 8.8% on Tuesday, its worst trading session since the 2008 global financial crisis.
Taiwan’s main stock index rose about 3.4% after suffering a record 8.4% drop on Monday.
- Earlier in New York, the tech-heavy Nasdaq opened down 6.3%, but the decline eased during the session, with the index closing down 3.4%.
- At the close of trading on Monday, the S&P 500 was down 3%, while the Dow Jones Industrial Average was down 2.6%.
- In Europe, Paris’ CAC-40 reversed earlier losses to fall 1.4%, while Frankfurt’s DAX and Britain’s FTSE 100 both lost around 2%.
Weak U.S. jobs data on Friday It has sparked concerns about growth in the world’s largest economy.
It also fueled speculation about when and how much the Federal Reserve might cut rates.
“Markets are very volatile right now and are likely to remain volatile until the Fed makes its decision in September. So we can’t rule out sharp swings in either direction,” said Stephan Angrik, chief economist at Moody’s Analytics.
There are also concerns that stocks of large technology companies, particularly those investing heavily in artificial intelligence (AI), are overvalued and are currently facing difficulties.
Last week, Chipmaker Intel Announces Massive LayoffsFinancial performance was disappointing.
There is also speculation that rival Nvidia, one of the main beneficiaries of the boom in demand for AI technology, may delay the launch of its latest product.
