Japan’s benchmark Nikkei 225 index climbs more than 10% after plunging the day before
TOKYO — Japan’s benchmark Nikkei 225 stock index climbed 10.7% on Tuesday morning, a day after falling from a near-record low of 12.4%.
The index gave up some of its early gains to trade up 8.7 percent at 34,211.83 in late morning trading. The gains followed sharp losses on Wall Street, spectacular but not on the scale of Monday’s rout in Tokyo.
The Nikkei is now close to where it was a year ago. Its biggest percentage gain ever was in October 2008, when it rose 14.2%.
Stocks rose by double-digit percentages similar to their losses the previous day, with Toyota Motor Corp. up nearly 12% in late morning trading.
Computer chipmaker Tokyo Electron jumped nearly 12%, Honda Motor Co. gained 16% and Mitsubishi UFJ Financial Group rose 7.6%.
The losses in recent sessions followed a decision by the Bank of Japan last week increase its main interest rate from nearly zeroSuch a move helps boost the value of the Japanese yen, but it has also led traders to hastily withdraw from deals in which they borrowed money at virtually zero cost in Japan and invested it elsewhere in the world.
Several factors combined to cause Monday’s carnage, according to Stephen Innes of SPI Asset Management, likening Tuesday’s rebound to a “lifeboat.”
“As always with the market, one must keep this in mind: yesterday’s misery often turns into today’s freefall. The rapid twists and turns of trading can turn what seemed like a disastrous situation into a fleeting memory, often laughed at on trading floors the next day,” he said.
