Japan stocks rebound sharply after worst rout in history as other Asia markets also rally

Hong Kong CNN —

Japanese shares soared in early trading on Tuesday, clawing back most of their record losses from the previous day and underpinning a regional rally.

The Nikkei 225 last traded about 10% higher, while South Korea’s Kospi rebounded by about 3%. Hong Kong’s Hang Seng Index rose 1%, and Taiwan stocks regained 4%. They all suffered major losses during the previous trading session.

The bounce in Japan is “typical after a market crash,” Neil Newman, head of strategy at Astris Advisory in Tokyo, told CNN. “Importantly: Fundamentals are sound, the economy is doing fine, there is no evidence of abandoning Japanese equities.”

One of the top gainers on Tuesday was soy sauce maker Kikkoman Corporation which was trading about 21% higher after losing nearly 17% the previous day.

Losses like that led the Nikkei to close 12.4% lower on Monday in its largest one-day fall since October 1987. It lost 4,451, its biggest point drop in history. The plunge triggered a global market rout. All major Asian, European and US markets fell substantially.

Wall Street also took a beating with all three major indexes falling between 2.6% and 3.4% on fears the US economy was slowing faster than expected. But the tide is turning there too, with S&P 500 and Nasdaq futures bouncing back in the hours after the close of the main trading session.

Three fears are emerging all at the same time to send markets into a tailspin Monday.

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Growing worries about a recession in the US economy and the rapid unwinding of popular carry trades involving the yen had sent the markets into a tailspin.

The surge in the yen, which started with the Bank of Japan signalling a hawkish tilt in monetary