Asia Markets: Nikkei Rebounds Strongly, Led by Short Covering and Euro Weakness
Japan's Nikkei Surges by 800 Points
TOKYO, August 8 (Reuters) -
The Nikkei stock average staged a strong rebound during the Asian trading session on Thursday, closing up by more than 800 points or 2.13%. The market recovered ground after a choppy session on Monday, boosted by short-covering and weakness in major European currencies.
The Nikkei average surged by more than 2% on Tuesday, reaching a two-week high. This rally was supported by optimism surrounding the euro zone, particularly the European Central Bank's asset purchase program.
However, analysts cautioned that the market remained volatile. Tomo Uetake, an analyst for Reuters, noted that "the dollar's rally is gaining significant traction today, which is putting increasing selling pressure on major European currencies." This currency movement could potentially weigh on the Nikkei in the coming sessions.
Despite the uncertainty, the Nikkei's strong rebound on Thursday signals a renewed appetite for risk among investors. Short-covering by foreign hedge funds and other speculators played a significant role in the rally. As European currencies weaken and global markets continue to digest the impact of the U.S. Federal Reserve's monetary policy stance, the Nikkei's performance will be closely watched for indications of market sentiment.
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