Japan's Nikkei share average jumped on Thursday as investors scooped up beaten-down stocks after U.S. President Donald Trump declared an immediate 90-day tariff pause for many countries.
As of 0147 GMT, the Nikkei (.N225) was up 7.9% at 34,226.17, while the broader Topix (.TOPX) climbed 7.2% to 2,518.26.
"Investors bought back stocks today, wishing that they had not dumped stocks in the previous session," said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.
"But the rally also means that the market was too bearish about the impact of Trump's tariffs," Suzuki said.
In a stunning reversal, Trump said on Wednesday he would temporarily lower the hefty duties he had just imposed on dozens of countries while further ramping up pressure on China, sending U.S. stocks rocketing.
The Nikkei saw huge volatility this week, closing 6% higher on Tuesday after a 7.8% slump on Monday to a 1-1/2-year low. The index closed 4% lower on Wednesday.
Thursday's rally followed surges on Wall Street overnight, with the S&P 500 soaring 9.5% for its biggest daily gain since 2008.
Uniqlo-brand owner Fast Retailing (9983.T) jumped 7.2% to provide the biggest boost to the index. Chip-related shares surged, with Tokyo Electron (8035.T) and Advantest (6857.T) advancing 11.77% and 13.66%, respectively.
All of the Tokyo Stock Exchange's (TSE) 33 industry sub-indexes rose, with the nonferrous sector (.INFRO.T) surging 12.65% to become the top gainer.
The banking sector (.IBNKS.T), which was hit hard by worries about the economic slowdown, rose 9.2%.
Morgan Stanley analysts said Trump's decision is bullish for Asia equities and most bullish for Japan equities.
That is because Japan "has a strong underlying reflationary dynamic but came closest in our coverage to pricing in such a recession at the lows on Monday," Morgan Stanley said in a note.
All but one of the 225 stocks on the Nikkei rose. Of more than 1,600 stocks trading on the TSE's prime market, 99% of the shares rose.
