EBC Markets Briefing | Nikkei index surged after Black Monday

Asian stocks rebounded and US stock futures pointed higher on Tuesday, as markets caught their breath after recent heavy selling on hopes that Washington might be willing to negotiate some of its aggressive tariffs.

A 5.6% rebound in Japan's Nikkei far outpaced other regional markets. The index tumbled to the lowest level in more than 2 years in the last session, led by the banking sector, as global recession jitters heated up.

Trump has vowed additional 50% levies if Beijing does not withdraw retaliatory tariffs on the US. Beijing said on Tuesday it will never accept the "blackmail nature" of the tariff threats.

The BOJ said uncertainty over Japan's economy was growing as some firms worried about the hit to profits from higher US duties. They were already brainstorming ways to cope with downside risks.

Japan's government and ruling bloc are considering compiling an extra budget to address the impact of increased tariffs and prolonged inflation, Kyodo news agency reported on Monday.

Real wages dropped for a second straight month in February, labour ministry data showed. Japanese companies have agreed to raise pay by an average of 5.4% this year, the biggest in more than 30 years, said Rengo.

The Nikkei index has remained deep in the oversold zone despite the rally. It may have more upside room, but a break above 34,800 is needed to negate the bearish bias.

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