- Title: JAPAN: Stocks plunge in wake of earthquake and nuclear crisis
- Date: 16th March 2011
- Summary: TOKYO, JAPAN (MARCH 15, 2011) (REUTERS) EXCHANGE STAFF WORKING STOCK PRICES ON BOARD INTERIOR OF EXCHANGE
- Embargoed: 31st March 2011 13:00
- Keywords:
- Location: Japan, Japan
- Country: Japan
- Topics: Disasters / Accidents / Natural catastrophes,Economic News
- Reuters ID: LVA6VXDEH3YP2DTV6R83CTLGXIIN
- Story Text: As concern about the crippling economic impact of the nuclear and earthquake disasters mounted, Japanese stocks plunged more than 10 percent on Tuesday (March 15), compounding a slide of 7.6 percent the day before.
The two-day fall has wiped $720 billion off the market.
The Nikkei fell 10.55 percent while the broader TOPIX index fell 9.47 percent.
The Nikkei share average and TOPIX Index posted their largest percentage falls since October, 2008, as investors dumped shares on fear over Japan's nuclear crisis.
The two also both recorded their third-largest percentage fall on record.
The Bank of Japan (BOJ) on Tuesday offered to pump 8 trillion yen ($98 billion) into the banking system, continuing its huge fund injection aimed at easing market jitters in the face of an escalating nuclear crisis and fears of unprecedented damage from the earthquake.
On Monday (March 14) the BOJ offered 15 trillion yen ($184 billion) in auction.
Top policymakers sought to contain a sharp sell-off in Tokyo stocks with reminders they kept a close watch over market moves and assurances about the economy's overall health.
Economics minister Kaoru Yosano said Japan's production has not fallen and the market confusion will calm down in a short time.
The yen rose on Tuesday, sparking market speculation that the authorities might intervene to prevent the currency's strength from further damaging an economy reeling from a triple blow of Friday's 9.0 magnitude earthquake, a tsunami and an escalating nuclear crisis.
"In the short term, there would be confusions, but I think it will recover in few months," Tokyo resident Keisuke Yamazaki said.
Others were disheartened by the impact of the disasters and nuclear crisis on the markets.
"I was hoping stocks wouldn't lose value this much, as we are already discouraged by the earthquake," Tokyo resident Hiroaki Matsumoto said.
"I was a little worried with the sharp fall of stock prices, but I think we have the strength to overcome this situation," Tomohisa Hodaka said.
Japan can intervene in the currency market but does not have authority to buy stocks directly from the market.
That means there is not much policymakers can do to prop up stock prices beyond verbal reassurances that Japan has the quake damage under control and that its economy remains in good shape.
The government on Monday tapped 30 billion yen ($368 million) from the 200 billion yen ($2.45 billion) in reserves set aside for disaster relief in the budget for the current fiscal year ending in March.
Noda said the government has ample funds to meet near-term costs of quake relief. But he stopped short of saying whether an emergency budget will be compiled and if so, when, stressing that the government first needed to estimate how much spending would be needed to cope with the devastation. - Copyright Holder: REUTERS
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