TOKYO, March 16 ― Tokyo stocks closed more than two per cent lower today as a sharp rally after the Bank of Japan announced emergency monetary policy measures quickly fizzled.
The benchmark Nikkei 225 index fell 2.46 per cent, or 429.01 points, to 17,002.04 while the broader Topix index ended down 2.01 per cent, or 25.36 points, at 1,236.34.
“The Lehman Brothers in 2008 was a financial crisis but what we are seeing now is a health crisis,” Mutsumi Kagawa, global strategist at Rakuten Securities, said of the new coronavirus outbreak.
“Authorities are pushing ahead with monetary easing and economic packages but it's not providing a direct cure for the pandemic,” he told AFP.
Japan also has worries over its hosting of the Olympic Games this summer, which had been expected to boost businesses in the world's third-largest economy.
“Even if the situation in Japan calms down, the global outbreak could get worse, fuelling fears that the Olympics might be cancelled and cooling sentiment,” Kagawa said.
Japanese markets swung wildly today as the central bank followed its counterparts around the world in an attempt to shore up sentiment amid mounting fears of a global recession.
The Nikkei shot up about two per cent in the minutes after the Bank of Japan announced emergency easing measures.
The BoJ said it would double its annual capacity to purchase exchange-traded funds and Japan real estate investment funds.
But it left its main interest rate unchanged at minus 0.1 per cent and also kept its upper limit for purchasing government bonds at ¥80 trillion.
It warned in a statement of “significant uncertainties over the consequences of the outbreak of Covid-19”.
The US Federal Reserve on Sunday announced drastic emergency measures to shore up confidence, including slashing the key interest rate to virtually zero.
The dollar was changing hands at ¥106.26 (RM4.29) in Tokyo this afternoon against ¥108.02 in New York on Friday.
In individual stocks trade, Sony tumbled 3.06 per cent to ¥5,633 and IT investor SoftBank Group dropped 2.49 per cent to ¥3,670.
Leading soy sauce maker Kikkoman plunged 5.12 per cent to 3,885 as it is expected to take a hit from a drop in restaurant demand. ― AFP
