By Brigid Riley
TOKYO (Reuters) – Japanese stocks rebounded sharply in early trade on Tuesday, after their biggest single day rout since the 1987 Black Monday sell-off in the previous session.
The rallied 8.1% at 34,004.22 as of 0026 GMT, while the broader was up 8.57%.
The Nikkei plunged 12.4% on Monday in its worst performance since the October 1987 crash, as investors were shaken by last week’s plunge in global stock markets, U.S. recession risks and worries investments funded by a cheap yen were being unwound.
Monday’s collapse was a “reminder that it is next-to-impossible to diversify equity risk by region (or by sector or style) during major corrections or bear markets,” said Stephen Dover (NYSE:), chief market strategist and head of Franklin Templeton Institute at Franklin Templeton.
“Opportunity will arise, but in our view, it is premature to step in at this point.”