(Updates index levels, comments in 5-6 and 14-15, other details

throughout)

TOKYO, Aug 6 (Reuters) - Japanese stocks rebounded

sharply in morning trade on Tuesday, after their biggest single

day rout since the 1987 Black Monday sell-off in the previous

session.

The Nikkei rallied 9.4% at 34,416.32 as of the

midday break, while the broader Topix was up 9.3% at

2,434.21.

The Nikkei was last up 2,957.9 points after rising over

3,000 points earlier in the session, surpassing its largest

intraday points gain on record.

The benchmark index plunged 12.4% on Monday in its worst

performance since the October 1987 crash, as investors were

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.

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 that 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."

On Tuesday, large price rebounds were led by big name

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

, up over 16%, and Advantest ( ADTTF ), rising 14.5%.

AI-focused startup investor SoftBank Group jumped

9.3%.

Circuit breakers were triggered multiple times before and

during the morning session, causing the temporary suspension of

trading in Topix and Nikkei futures.

Last week, the Bank of Japan (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.