Japan’s benchmark Nikkei 225 index soars more than 10% after plunging a day earlier

Japan’s benchmark Nikkei 225 share index surged by as much as 10.7 percent early on Tuesday, bouncing back from its biggest drop in 37 years the previous day. The index closed 10.2 percent higher at 34,675.46, showing some fluctuation throughout the day. Other Asian markets also rebounded after significant losses on Wall Street, though not as severe as the 12.4 percent drop in Tokyo on Monday.

Many stocks that had experienced double-digit losses the day before saw similar gains on Tuesday. For instance, Toyota Motor Corp.

soared by 12.8 percent, while computer chip maker Tokyo Electron jumped by 16.6 percent. Honda Motor Co. and Mitsubishi UFJ Financial Group also experienced notable increases of 14.7 percent and 5.8 percent, respectively.

The recent losses in the market were attributed to the Bank of Japan’s decision to raise its main interest rate from nearly zero, which strengthened the Japanese yen but led traders to exit deals where they had borrowed money at very low cost in Japan and invested it elsewhere.

According to Stephen Innes of SPI Asset Management, Tuesday’s market rebound is akin to a “lifeboat.” He emphasized that the swift fluctuations in trading can transform what seemed like a dire situation into a fleeting memory, often joked about in trading rooms the next day. As of now, the Nikkei is up 7.7 percent from a year ago but more than 9 percent lower than its level three months ago. Its largest ever percentage gain was 14.2 percent in October 2008.