Japan’s Nikkei Records Unprecedented Gain On Tuesday

 

Japanese stocks soared, with the Nikkei 225 Stock Average staging the steepest advance since the aftermath of the 2008 Lehman Brothers Holdings Inc. bankruptcy, amid speculation a selloff that drove valuations to an 11-month low was overdone.

The Nikkei 225 jumped 7.7 percent to 18,770.51 at the close in Tokyo, its biggest gain since October 2008, to reverse losses on Tuesday that wiped out the gauge’s 2015 advance.

The broader Topix index surged 6.4 percent to 1,507.37, the most since March 2011.

Japanese shares suffered the world’s second-steepest drop through Tuesday since China’s shock yuan devaluation last month, with Shanghai’s equity gauge the only one that fared worse.

The Topix lost 16 percent from from an August peak through Tuesday as concern about China’s economic outlook roiled markets in Tokyo.

The yen touched an seven-month high versus the dollar on Aug. 24, the same week that foreigners fled Japanese equities at the fastest pace in at least a decade.

Short-selling has accounted for more than 40 percent of trading on the Tokyo Stock Exchange since Sept. 1, the highest proportion since the bourse began keeping daily records in 2008.

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