Japanese stocks rebounded, buoyed by the solid performance of US equities ahead of Trump's announcement on reciprocal tariffs, as well as a pause in the yen's strength.

The Topix Index rose 1.2% to 2,690.37 as of 9:20 a.m. Tokyo time after a two-day loss of more than 5.6%.

Sony Group Corp. contributed the most to the Topix's gain, increasing 1.9%. Out of 1,692 stocks in the index, 1,415 rose and 223 fell, while 54 were unchanged.

The Nikkei climbed 1% to 35,986.04 after entering a technical correction Monday.

Bank, insurance and financial shares rose, supported by that sector in the US. In addition to gains in electronics and automobile shares, trading, mining, oil and coal products also rose as crude oil futures were higher. Domestic demand-related stocks such as electricity, gas and real estate were also stronger.

The fact that U.S. stocks rebounded significantly from their lows yesterday indicates that there was a reversal of oversold positions prior to the impending tariff announcement, says Hideyuki Ishiguro, chief strategist at Nomura Asset Management. Japanese stocks today are likely to follow this trend, he says.

At the same time, traders need to be prepared for the market to move either up or down when the tariffs are unveiled, adding that once the overall picture becomes clear, investors will be able to make forecasts more easily.

Source: Bloomberg