(Reworks throughout, with current levels, new comments in

paragraph 7, details on response from Japanese authorities in

paragraphs 11-12)

By Brigid Riley

TOKYO, Aug 6 (Reuters) - Japanese stocks rebounded

sharply on Tuesday, clawing back most of the double-digit losses

suffered the previous day as comments from the U.S. Fed and data

gave investors pause in their concerns over recession and equity

valuations.

The Nikkei's rally, after the market's biggest single day

rout since the 1987 Black Monday sell-off, came as the yen

reversed its gains, indicating the carnage in yen-funded

global carry trades too was easing.

In a turbulent day of trading, the Nikkei was up 8%

at 33,975.53 as of 0516 GMT, after plunging 12.4% on Monday. The

index was last up 2,623.1 points, having earlier jumped more

than 3,000 points to surpass its largest intraday points gain on

record.

The broader Topix was up 7.5% at 2,394.33.

Investors had been shaken by last week's plunge in global

stock markets, U.S. recession risks, and worries investments

funded by a cheap yen were being unwound, triggering a sell-off

in Japanese equities on Monday.

Traders said they now appeared to be reconsidering the

severity of their initial response, buying back shares on the

dip.

"Fundamentally, nothing significant has changed for the

Japanese economy. It is the unwinding of the carry trade driving

a lot of the momentum sells," said Ray Sharma-Ong, head of

multi-asset investment solutions for Southeast Asia at abrdn.

The Nikkei rally helped lift other Asian stock markets.

Overnight, safe-haven U.S. yields too had risen from lows in a

sign the panic was abating.

But uncertainties remained, with analysts pointing to the

possibility of more volatile market moves in the near-term.

"We're not yet sure if this is just a breather between

water-boardings or there is more pain to follow," said Matt

Simpson, senior market analyst at City Index.

Japanese officials meanwhile scrambled to calm markets, with

Prime Minister Fumio Kishida urging caution and calling on

market participants to stay calm.

An emergency trilateral meeting of the Ministry of Finance,

Financial Services Agency and the Bank of Japan is scheduled for

0600 GMT to discuss markets.

BOJ IN A HURRY?

Khoon Goh, head of Asia research at ANZ, noted that the

Nikkei also rebounded to varying degrees after the three

previous occasions when it experienced double digit declines,

including in the wake of the global financial crisis in 2008 and

Tohoku earthquake in 2011.

"But it took a while before the Nikkei clawed back all those

losses," he said.

From July 11 to Monday's close of 31,458.42, the Nikkei has

seen 113 trillion yen ($792 billion) wiped off its peak market

value.

Monday's collapse was a "reminder that it is

next-to-impossible to diversify equity risk by region (or by

sector or style) during major corrections or bear markets," said

Stephen Dover, chief market strategist and head of Franklin

Templeton Institute at Franklin Templeton.

"Opportunity will arise, but in our view, it is premature to

step in at this point."

Last week, the BOJ raised interest rates to levels unseen in

15 years, a hawkish move that analysts also say spooked the

market especially given fears of a possible U.S. recession.

"The market was afraid (the BOJ) may tighten too fast," said

Kenji Abe, chief strategist at Daiwa Securities.

BlackRock Investment Institute said on Tuesday that they see

a "greater risk of a BOJ policy misstep" and are reviewing their

Japan overweight position.

On Tuesday, large price rebounds were led by big name

technology shares such as chip-related stocks Tokyo Electron ( TOELF )

, up 15%, and Advantest ( ADTTF ), rising over 13%.

AI-focused startup investor SoftBank Group jumped

8.6%.

Circuit breakers were triggered multiple times before and

during the session, causing the temporary suspension of trading

in Topix and Nikkei futures.