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Asian markets rally as volatile week continues

By Jazmin Goodwin and Laura He, CNN Business

(CNN) -- The market volatility is continuing into Asia.

Markets in the region rallied Tuesday, rebounding from steep losses the day before.

Japan's Nikkei rose 3.3% in morning trading, holding onto gains after Bank of Japan kept interest rates unchanged.

The Japanese central bank said it will closely monitor the impact of Covid-19 and "will not hesitate to take additional easing measures if necessary."

South Korea's Kospi jumped 4% after recording its worst day since March on Monday. The Korean index is now on pace for its best day since March, when markets were also gripped by volatility. Hong Kong's Hang Seng Index advanced 2.8%, while China's Shanghai Composite added 1.1%.

The uptick followed a wild day on Wall Street overnight. The Dow swung more than 1,000 points in turbulent trading before ending the day up 158 points, or 0.6% higher. The S&P 500 finished 0.8% higher, and the Nasdaq Composite climbed 1.4%.

Dow futures were last up 290 points, or 1.1%. S&P 500 futures and Nasdaq futures both increased 1%.

Stocks fell sharplyin the United States on Monday at the opening bell as investors were spooked by a resurgence of Covid-19 cases in the United States, as well as in China. But the market soon recovered. Action from the Federal Reserve helped boost sentiment: The central bank finally launched its Main Street Lending Program to help small and medium-sized businesses, and it also committed to buying corporate bonds.

Investors in Asia, meanwhile, are awaiting Bank of Japan's policy decision later in the day. Markets expect the central bank to keep its monetary policy unchanged, after the government introduced massive stimulus efforts to protect the economy from the fallout of the coronavirus outbreak.

In oil trading, US crude futures dropped 0.5% to $36.95 per barrel during Tuesday trading hours in Asia. Brent, the global oil benchmark, lost 0.5% to $39.53 per barrel. The two contracts settled higher on Monday, both up by more than 2%.

Looking ahead, US retail sales and industrial production data are scheduled for release on Tuesday. Fed Chairman Jerome Powell will testify in front of Congress this week.

-- Anneken Tappe contributed to this report.

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