After suffering a massive 11 percent drop last week, Japan's Nikkei average has exhibited a dramatic turnaround during Monday trading, with the country's shares surging 7.2 percent to 16,022.58, according to FOX Business News.
The impressive numbers exhibit the Nikkei's biggest intraday percentage gain since October 2008. With the rebound, Japan's benchmark index has managed to regain two-thirds of the 11 percent loss that it incurred during the previous week.
The market's impressive performance on Monday stands in contrast to the country's dismal domestic data, which was released earlier during the day. According to the domestic data, Japan's economy contracted 1.4 percent in the final quarter of last year, reports The Business Recorder.
Analysts believe that the contraction was primarily caused by sluggish consumer spending during the fourth quarter, as well as a number of other global economic factors.
Thus, strategists, such as Takuya Takahashi from Daiwa Securities, believe that the Nikkei's performance on Monday was simply a technical rebound, or a reaction to its massive loss during the previous week, reports Reuters.
"The Japanese market has become numb to its own economy as there were scarier events in the past week in the global market. Today is all about a technical rebound," he said.
Other indexes in the country also posted dramatic gains on Monday, with the broader Topix surging 8 percent to 1,292.23 and the JPX-Nikkei Index 400 rising 8.3 percent to 11,675.35.
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