Japan's Nikkei rebounds on softer yen after sharp sell-off

Japan's Nikkei share average rose more than 1 per cent in early trade on Tuesday, rebounding from a nearly 5 per cent drop in the last session, as a softer yen supported exporters including automakers.

The Nikkei .N225 was up 1.09 per cent to 38,333.6, as of 0008 GMT, and the broader Topix .TOPX had risen 0.88 per cent to 2,669.14.

The Nikkei fell 4.8 per cent on Monday in reaction to a sharply stronger yen after perceived monetary policy hawk Shigeru Ishiba won a leadership contest to become the country's prime minister. .T

The dollar rose overnight after Federal Reserve Chair Jerome Powell adopted a more hawkish tone on the economy, leading traders to pare bets that the U.S. central bank will cut rates by 50 basis points again at its next meeting. FRX/

A softer yen tends to help exporter shares as it increases the value of overseas profits in yen terms when firms repatriate them to Japan.

Uniqlo-brand owner Fast Retailing rose 1.71 per cent and provided the biggest boost to the Nikkei . Chip-related heavyweights rose, with Tokyo Electron 8035.T and Advantest 6857.T gaining 1.76 per cent and 1.54 per cent, respectively.

Toyota Motor 7203.T climbed 1.67 per cent and Honda Motor 7267.T gained 2.45 per cent.