Japanese Stock Market Rebounds With Historic Single-Day Gains

Japanese stocks rebounded sharply on Tuesday, recovering from a massive sell-off the day before. This rally in the Nikkei, which saw its biggest single-day point gain, was driven by investor caution and easing concerns over a U.S. recession. Market uncertainties, however, still loom large.

Japanese stocks made a stunning recovery on Tuesday, bouncing back from the previous day's dramatic sell-off and double-digit losses. Investor concerns over equity valuations and a possible U.S. recession were tempered by Federal Reserve comments and data.

The benchmark Nikkei index surged 10.2% to close at 34,675.46, after a gut-wrenching 12.4% nosedive on Monday. This rally marked its largest-ever single-day point gain and the biggest daily percentage rise since October 2008. The broader Topix also climbed by 9.3%, ending at 2,434.21.

Investor anxiety had been triggered by a series of global market plunges and recession fears, leading to a massive sell-off on Monday. However, traders appeared to be re-evaluating their initial responses, buying back shares that had plunged.

Analysts cautioned about potential market volatility ahead, even as Prime Minister Fumio Kishida urged market participants to remain calm. An emergency meeting involving Japan's Ministry of Finance, Financial Services Agency, and the Bank of Japan was held to discuss the market turmoil.

Despite the historic rebound, uncertainties remain, with experts warning about further possible turbulences in the near-term. Some analysts have pointed to a "greater risk of a BOJ policy misstep" following the Bank of Japan's aggressive interest rate hike last week, its first in 15 years.

While major shares like Tokyo Electron and SoftBank Group saw significant gains, circuit breakers were triggered multiple times, suggesting that market participants should brace for continued volatility.

(With inputs from agencies.)