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TOKYO, Aug 9 (Reuters) – Japan’s Nikkei share average rebounded in early trade on Friday, as a surprise drop in U.S. unemployment claims assuaged recession fears, while a softer yen also provided some respite.
The latest unemployment data suggested that fears the U.S. economy could be heading for a hard landing may have been overblown and the gradual softening in the labor market remains intact.
The Nikkei .N225 was up 1.7% at 35,412.07, as of 0029 GMT, while the broader Topix .TOPX gained 1.4%.
The rebound came in shortly after an overnight jump in U.S. stocks, with the Nasdaq and S&P 500 each ending more than 2% higher on Thursday. .N
“The prospect of better-than-feared U.S. growth and a weaker yen constrain the fundamental and technical risks that inspired the extreme volatility experienced at the start of the week,” Kyle Rodda, senior financial market analyst at Capital.com, wrote in a note.
The yen was trading at 147.275 yen JPY= against the dollar.
Trade has been choppy in recent days following a massive double-digit swings that rocked Japan’s stock markets earlier this week.
U.S. recession worries and the unwinding of investments funded by a soft yen fueled global market stress.
A hawkish shift by the Bank of Japan last week raised an alarm over how fast the central bank would tighten monetary policy, prompting its deputy governor to do some damage control on Wednesday.
