BENGALURU: Equities in Asian emerging markets regained some footing on Tuesday after a brutal global sell-off a day earlier, although investors continue to grapple with the yen-funded carry trades and worries over a slowdown in the United States.

An MSCI gauge of Asian emerging market equities outside of Japan rose as much as 2% to mark its best day since early June, after sliding 4.2% on Monday.

An index, including Japanese stocks, advanced up to 4% as the Nikkei staged a sharp recovery.

Tech-heavy indexes in Taiwan and South Korea KOSPI jumped up to 4.6% and 5.6%, respectively. The KOSPI marked its best intraday gain since last November.

In Southeast Asia, benchmarks in Indonesia, Malaysia, and Thailand added between 0.2% and 1.5%, although Singapore’s FTSE Straits Times fell 1% on pressure from banks.

An unwinding of yen carry trades, lukewarm tech earnings, and fears that the US could be sliding into recession convulsed equity markets on Monday, prompting investors to dump their risky assets and move into safer bonds.

“The size of sell-offs seen thus far is too much and fears of a recession in the US economy have eased,” Ryota Abe, an economist at SMBC said.

“Market sentiment will improve with some higher caution on the global economy and the geopolitical risks than before,” Abe said.

He added that upcoming US economic data may suggest the slowdown is continuing which “may bring a view that the economy will someday be going to enter recession”.

Currencies in the region were on the back foot as the greenback edged higher, recovering from a near seven-month low touched on Monday.

The Malaysian ringgit led losses in the region with a more than 1% fall. The currency surged 2.3% in the prior session to touch its highest level since April last year.