Japanese Stocks Lead Asia’s Rebound While Yen Drops – Asia Market Wrap

Japanese shares surged, leading Asia’s gains, as they recouped some of the losses suffered in Monday’s worldwide disaster, which wiped out billions across markets from New York to London. US market futures also rose, but Treasuries sank.

Japan’s two main stock indices both soared about 11% after falling more than 12% the day before, while South Korea’s Kospi Index rose more than 3%. Hong Kong stocks surged, while mainland Chinese stocks were muted. The earliest positive signals indicate that traders are collecting their breath after a tumultuous day in which the VIX reached a record high in data dating back to 1990.

Speculation over a potential US recession, an unwinding of artificial intelligence exuberance, and a rising Yen driving an unwind of carry trades triggered a three-day selling spree in global markets. Analysts predict the stock to remain under pressure.

The Yen plummeted as much as 1.5% on Tuesday, before recovering some of its losses. The Euro is still up roughly 11% this quarter on predictions of more rate hikes by the BoJ. The Nikkei 25 futures circuit breaker was activated before the market started, following its largest one-day drop in Yen terms on Monday.