Nikkei jumps 6% as regional markets claw back losses; Australia’s ASX 200 rises 2.3%
Asian markets rallied on Tuesday, rebounding from the previous session’s brutal sell-off, though analysts cautioned that the surge could prove short-lived amid persistent global trade tensions.
Japan led the recovery, with the Nikkei 225 soaring 6.03% to close at 33,012.58, while the broader Topix gained 6.26%. In Australia, the S&P/ASX 200 jumped 2.3%, snapping a three-day losing streak. Gains were broad-based across the region, with Hong Kong’s Hang Seng Index up 1.51% and Mainland China’s CSI 300 rising 1.71%.
The rally followed Monday’s historic rout, which saw Hong Kong’s Hang Seng plunge over 13%—its sharpest one-day decline since 1997—and steep losses across Japan, South Korea, and Southeast Asia. The selloff was triggered by renewed fears of a full-blown trade war after U.S. President Donald Trump threatened an additional 50% tariff on Chinese imports unless Beijing scrapped retaliatory measures.
Though markets staged an impressive rebound on Tuesday, some analysts were quick to dismiss it as a technical reprieve rather than a true turning point.
“The ASX200 rebounded today but it has all of the hallmarks of a dead cat bounce,” said Kyle Rodda, analyst at Capital.com, referring to a short-lived recovery that follows a sharp decline. “The sectoral rallies were the biggest in those that saw the largest drawdowns yesterday.”
Rodda warned that a sustained recovery would only materialise if Trump walked back his tariff threats or committed to a final, firm level of duties. “We are probably still in the eye of the storm,” he said.
In Tokyo, markets were buoyed by news that Japan’s economy minister had been appointed to lead trade negotiations with U.S. Treasury Secretary Scott Bessent. The move was interpreted as a signal that diplomatic engagement could still be on the table.
Meanwhile, China held firm, with its Ministry of Commerce vowing to “resolutely take countermeasures” if the U.S. followed through with its threatened escalation.
Despite the bounce, volatility remains high. In Southeast Asia, markets continued to see sharp moves. Indonesia’s Jakarta Composite slid 7.87% after trading resumed following a circuit breaker, while Vietnam’s benchmark fell 6.48% and Thailand’s SET index dropped to its lowest level since March 2020.
The renewed turmoil comes as Trump’s tariffs—initially set at 10% across a broad range of imports—went into effect on Saturday, with reciprocal tariffs from other countries set to begin on April 9.
U.S. markets also remained volatile. The S&P 500 fell for a third straight session on Monday, though futures rose overnight, helping lift sentiment in Asian trade. Futures tied to the Dow Jones Industrial Average were up 1.2%, while Nasdaq-100 futures climbed 1.1%.
The Australian dollar regained ground after slipping below 60 US cents on Monday. It rose 1.3% to around 60.65 cents by Tuesday evening.
