Japan's most-watched stock index surged more than 13 per cent in morning trade, tracking strong rebounds in global markets as investors cheered widespread government efforts to shore up the world's battered financial system.
The Nikkei 225 index soared 1,079.13 points, or 13.04 per cent, to 9,355.56 at the end of the morning session - a sharp reversal after the market plunged nearly 10 per cent Friday and a staggering 24 per cent last week, its worst week ever.
Because of a national holiday yesterday, this was the first chance for investors in Japan to react to a raft of emergency measures by governments around the world to thaw frozen credit markets and bolster funding to banks.
"Investors were relieved by government moves to rescue the global financial system," said Kazuhiro Takahashi, general manager at Daiwa Securities SMBC Co Ltd "Since the opening, buying is spreading across the board. It was due to rallies in the US, European and Asian markets yesterday."
In New York, the Dow Jones industrial average gained more than 11 per cent - its biggest one-day rally since 1933.
Japan's broader Topix index was up 12.68 per cent to 947.47.
Investors were heartened by the US government's move to inject capital into banks and get lending flowing again. That followed signals that European governments were putting up nearly USD 2 trillion to safeguard their own banks.
The British government said yesterday that it is injecting a total of USD 63 billion into three leading banks - Royal Bank of Scotland PLC, Lloyds TSB PLC and HBOS PLC - in return for equity stakes. Taxpayers will own about 60 per cent of RBS and 40 per cent of the merged Lloyds TSB and HBOS.