Bank of Japan Governor Haruhiko Kuroda pledged Monday that the central bank will make every effort to ensure stability in financial markets that have been roiled as the new coronavirus spreads worldwide.
Issuing an emergency statement, Kuroda said the BOJ “will closely monitor future developments, and will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases.”
The move comes amid expectations that the world’s major central banks will prepare a joint assault on the excessive volatility seen recently in stock and other markets, with the U.S. Federal Reserve issuing a similar statement last week that signaled its willingness to cut interest rates to support the economy.
In line with shares on Wall Street, Tokyo stocks plunged last week with the benchmark Nikkei losing more than 2,200 points, its biggest weekly fall since October 2008, around the time of the global financial crisis.
“Global financial and capital markets have been unstable recently with growing uncertainties about the outlook for economic activity due to the spread of the novel coronavirus,” Kuroda said in the statement.
The spread of the virus, which originated in China, has been impacting production and exports around the world, causing fears of a significant economic slowdown.
On Monday, Tokyo shares opened lower, led by exporter issues affected by the yen’s appreciation against the U.S. dollar, which slipped to 107.00 yen in Oceanian trading, its lowest since early October. The yen was bought among other safe-haven assets such as government debt.
But shares gradually pared the losses on the BOJ’s statement as well as some investors buying after last week’s sharp falls.