Analysts have said that along with the weak US jobs data, part of the market volatility in recent days has stemmed from other factors.

Part of that is increasing geopolitical tensions in the Middle East. 

Another was the Bank of Japan’s decision last week to raise interest rates, which contributed to a rise in the yen.

With rates moving higher, investors have started selling out of their positions.

It’s tied to the carry trade and involves global investors borrowing money from Japan, which for some time has been a low interest rate environment, and investing it in the United States or Australia, which have higher interest rate environments compared to the North Asian country.

The higher yen also caused Japanese stocks to plummet.

But yesterday the Nikkei soared more than 10 per cent in trading, just a day after the index suffered its worst session since 1987.

It was a boost to investor sentiment overnight.

You can read more about the carry trade from my colleague, David Taylor, here.