SYDNEY/SINGAPORE, Aug 6 (Reuters) - Japanese stocks

jumped at the open on Tuesday, underpinning a recovery across

battered Asian share markets and even triggering circuit

breakers in some, after central bank officials said all the

right things to soothe investor nerves.

The Nikkei soared more than 8% to above 34,000 in

the opening minutes of trading, rebounding sharply from its

31,458 close on Monday. The index had plummeted 12.4% in its

worst selloff since the 1987 Black Monday crash.

Wall Street also looked steadier with S&P 500 futures

rebounding 0.9% in early trade, while Nasdaq futures rose

1.2%. The S&P 500 had lost 3.00% over Monday, with the

Nasdaq Composite down 3.43%.

"After the breathtaking and historic moves seen across Asian

markets yesterday, driven predominantly by a significant

liquidation of margin positions, we look for a solid counter

rally on open today," said Chris Weston, head of research at

broker Pepperstone.

However, he cautioned that the level of implied volatility

for the Nikkei was at a stratospheric 70%, suggesting fireworks

were likely for some time yet.

"After such a furious shake-out of leveraged positioning,

with Japanese banks absolutely taken to the cleaners, it will

take the bravest of investors to buy with any conviction."

Currencies also seemed to be reversing some of Monday's

sharp moves, as the dollar edged up to 145.64 yen,

having sunk 1.5% on Monday to as deep as 141.675. The yen has

shot higher in recent sessions as investors were squeezed out of

carry trades, where they borrowed yen at low rates to buy higher

yielding assets.

The dollar pared its losses on the safe-haven Swiss franc,

holding at 0.8546 francs from a low of 0.8430.

Treasury yields had also come off their lows, in part in

reaction to a rebound in the U.S. ISM services index to 51.4 for

July. In particular, it employment index jumped 5 points to

51.1, suggesting last week's payrolls report may have overstated

the weakness in the labour market.

"Gauging the bottom of such historic selloffs is complicated

and investors will most likely remain cautious before pouring

capital back into equity markets," said Boris Kovacevic,

Austria-based global macro strategist at payments firm Convera.

"However, the dollar-yen pair has now fallen 12% since

peaking five weeks ago and is in highly oversold territory. The

yen is therefore vulnerable to any upside surprises in U.S.

macro data leading investors to reconsider the recession trade.

This would help Japanese equities stabilize," he said.

Yields on 10-year Treasury notes were back at

3.84%, having been as low as 3.667% at one stage.

Federal Reserve officials did their best to reassure markets

with Fed San Francisco President Mary Daly saying it was

"extremely important" to prevent the labor market tipping into a

downturn.

Daly added that her mind was open to cutting interest rates

as necessary and policy needed to be proactive.

The comments underpinned market expectations that the Fed

would cut by 50 basis points at its September meeting, with

futures implying an 87% chance of such an outsized move.

The market has around 115 basis points of easing priced in

for this year, and a similar amount for 2025.

In precious metals, gold failed to get a safe haven bid amid

talk investors were taking profits to cover losses elsewhere.

Spot gold stood at $2,409 an ounce after losing

1.52% overnight.

In energy markets, oil prices bounced early Tuesday as news

that several U.S. personnel were injured in an attack against a

military base in Iraq stoked fears of a wider conflict.

U.S. West Texas Intermediate crude futures CLc1 climbed

$1.18, or 1.6%, to $74.12 per barrel.