Coronavirus: Asian stocks turn green on Bank of Japan stimulus pledge
Asian stocks stemmed their losses overnight as shares rose in response to the Bank of Japan’s move to inject stimulus to save its economy from the worst impact of the coronavirus outbreak.
The Nikkei and Hong Kong’s Hang Seng both climbed after Bank of Japan governor Haruhiko Kuroda pledged to help protect markets from exposure to the growing coronavirus crisis.
Kuroda’s comments follow a similar promise from US Federal Reserve chairman Jerome Powell over the weekend.
“Overseas and domestic financial markets continue to make unstable movements due to heightening uncertainty over the impact on the economy from the spread of the coronavirus,” Kuroda said.
“The BoJ will monitor developments carefully, and strive to stabilise markets and offer sufficient liquidity via market operations and asset purchases.”
Traders pushed the Nikkei up 0.95 per cent and the Hang Seng up 0.6 per cent as they welcomed signs of central banks moving to mitigate fallout from the coronavirus outbreak.
Travel restrictions and store closures to stem the spread of the crisis have led to supply chain disruption for businesses and diminished consumer confidence.
That has hurt economies, and China released data over the weekend showing Chinese factory activity fell in February at its fastest rate on record.
The Bank of Japan pledged to use whatever instruments necessary, including injecting money into the market, to ward off the effects of the coronavirus.
On Friday, the US Federal Reserve said it is monitoring developments for risks to the US economy and will intervene if necessary.
Italy, which experienced a huge spike in cases last week and over the weekend, has pledged to inject €3.6bn into its stuttering economy. That would break rules on managing its budget deficit, which Italy has asked the EU to sanction.
Covid-19 is now responsible for 3,048 deaths and has infected almost 90,000 people worldwide. Last week a spike in coronavirus cases outside of China sent stock markets crashing. The US and UK experienced their worst stock falls since the 2008 financial crisis, wiping £200bn off the FTSE 100.
Firms including Guinness brewer Diageo and British Airways owner IAG have issued profit warnings off the back of the impact of the coronavirus crisis.