Japan injects $6.6 million to ease COVID-19 market panic, Nikkei down 6.08%
Tokyo, Mar 13 (efe-epa).- The Bank of Japan injected 700 billion yen ($6.6 million) into the financial system Friday through the purchase of sovereign bonds, to mitigate market volatility due to the novel coronavirus pandemic, after the Nikkei ended trading with a 6.08 percent drop.
The bank made this large liquidity contribution in two branches Friday, in an extremely volatile day for the Tokyo Stock Exchange after its main Nikkei indicator fell by as much as 10 percent during the session.
The Nikkei lost 1,128.58 points Friday and ended the week at 17,431.05, while the Topix, which groups the firms in the First Section – those with the largest market capitalization – fell 66.18 points or a 4.98 percent, up to 1,261.70 integers. The Nikkei suffered a midday drop of up to 1,869 points, the largest in 30 years
Yoshiki Takeuchi, vice finance minister, said the authorities would observe market trends and respond as necessary following the stock crash.
The bank has carried out a large state bond-purchasing program since 2013 for the yield of these debt values – with a term of 10 years – to be maintained at about 0 percent, within the framework of its broad monetary easing strategy.
The Nikkei fell sharply as trading began and went below the psychological barrier of 18,000 integers for the first time since November 2016, when the United Kingdom negotiated its exit from the European Union.
The Tokyo market experienced another day of panic after Wall Street closed with a 10 percent plunge of its main Dow Jones economic indicator following the travel suspension from Europe to the United States and despite drastic liquidity injections announced by the Federal Reserve.
In addition to the emergency meeting convened mid-session by the executive and the central bank, Taro Aso, Japan’s head of finance and deputy prime minister, appealed for calm.
“Concern about the uncertain future is one of the factors of the strong movement in the market. However, the financial situation of Japanese companies is not bad, regardless of their market value,” Aso said. EFE-EPA