Japanese equities powered higher from the open, retracing some of the losses sustained in Monday’s global rout, which wiped out billions across markets from New York to London. US equity futures also advanced in early Asia trading and Treasuries fell.

The Nikkei 225 Stock Average jumped as much as 8.3% after tumbling 12.4% the day before. Shares in Australia were little changed, while futures in Hong Kong pointed to gains. The initial positive signs Tuesday suggest markets may be able to catch their breath following a dramatic day in which Wall Street’s “fear gauge” – the VIX – at one point registered a record increase in data going back to 1990.

The Nikkei 25 futures circuit breaker was triggered before the market opened after having suffered its biggest one-day slump in yen terms Monday. The yen weakened more than 1% versus the dollar after surging over 3% Monday.

“This level of implied volatility almost guarantees fireworks in the price action,” Chris Weston, head of research at Pepperstone Group Ltd. in Melbourne, wrote in a research note. “I prefer to buy a potential rip after the dip, in the ‘hope’ that the move can be sustained.”

While the S&P 500 pared some of its losses to finish 3% lower Monday, it still suffered the biggest slide in about two years amid strong trading volume. The tech-heavy Nasdaq 100 saw its worst start to a month since 2008. Still, futures show both those indexes may gain when US trading begins later Tuesday.

Speculation about a looming US recession — mostly seen as premature — wiped out a celebratory mood driven by recent signals from the Federal Reserve about the timing of its first rate cut. The repricing was so sharp that the swap market earlier assigned a 60% chance of an emergency rate reduction by the Fed over the coming week. Those odds subsequently ebbed.

Treasuries lost some steam after a surge that briefly drove two-year yields — which are sensitive to monetary policy — below those on 10-year bonds. US 10-year yields rose five basis points to 3.84% on Tuesday. A gauge of perceived risk in the US corporate credit markets soared, with the turmoil effectively shutting down bond sales on what had been expected to be among the busiest days of the year. Bitcoin sank about 10%.

In Asia, the wave of selling that hit a fever pitch in Japan may subside. On Monday, investors rushed to unwind popular carry trades, powering a 2% jump in the yen and causing the Topix stock index to shed 12% and close the day with the biggest three-day drop in data stretching back to 1959. The rout wiped out $15 billion of SoftBank Group Corp.’s value on Monday.

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