A general view shows the Tokyo Stock Exchange in Tokyo on August 6, 2024. Tokyo stocks surged on August 6 following a record selloff the previous day that was fuelled by worries over the US economy and a stronger yen. (Photo by Kazuhiro NOGI / AFP)
Tokyo, Japan — Tokyo’s key Nikkei index closed more than 10 percent higher 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 10.23 percent, or 3,217.04 points, to end at 34,675.46, while the broader Topix index added 9.30 percent, or 207.06 points, to 2,434.21.
On Monday, the Nikkei plunged more than 12 percent, or 4,451.28 points — the largest points drop in its history.
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Prime Minister Fumio Kishida said Tuesday it was best to approach the sharp swings with a cool head as analysts predicted that volatility could continue for days.
“The stock market has been moving again today, and I think it is important to judge this situation calmly,” Kishida said at a scheduled news conference.
“We will continue to monitor the situation with a sense of urgency and to carry out economic and fiscal management in close cooperation with the Bank of Japan,” he said.
Nomura Securities said the market would likely remain volatile this week. “Today’s gain can be explained in one phrase: a technical rebound” after the sharp fall, it said.
IwaiCosmo Securities said concern over the US economy had been partially assuaged by a better-than-market-expected improvement in service-sector business sentiment for July.
READ: Tokyo’s Nikkei dives 12.4%, suffers record points loss
“In Japan, real wages in June turned positive for the first time in 27 months, which also brought some relief,” the brokerage added.
The yen stood at 145.94 against the dollar, compared with 146.28 in early trade. On Monday the Japanese currency hit 141.70, its strongest value since early January.
A higher 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 14.70 percent to 1,435.5 yen following a report that it was expected to announce a record quarterly profit.
Toyota spiked 12.81 percent to 2,518 yen and Sony Group jumped 9.12 percent to 12,315 yen.