Japan stocks plunge after quake, tsunami devastation

Tokyo - Japanese shares plummeted Monday, falling below 10,000 after a magnitude- 9 earthquake and tsunami hit north-eastern Japan last week.

The benchmark Nikkei 225 Stock Average lost 633.94 points, or 6.18%, to close at 9,620.49, falling below the key 10,000 level for the first time in three-and-ahalf months. The broader Topix index was down 68.55 points, or 7.49%, at 846.96. The Japanese central bank has injected 15 trillion yen (183 billion dollars) into short-term money markets to help stabilise the financial system after Friday’s quake and tsunami, news reports said.

The quake was the largest ever recorded in Japan and one of the largest ever measured in the world. On currency markets at 3pm (0600 GMT), the dollar traded at 82.15-16 yen, down from Friday’s 5 pm quote of 82.78-81 yen.

The euro traded at 1.3926- 3928 dollars, up from 1.3899-3909 dollars Friday, and at 114.42-46 yen, up slightly from 114.32-36 yen. Atsushi Saito, president of the Tokyo Stock Exchange Group Inc, pledged that the nation’s key equities market would remain open after the deadly quake. “Considering that stocks are frequently being traded across borders, it is our responsibility to offer as many trading opportunities as possible, so the mother market of Japanese stocks can form appropriate stock prices reflecting supply and demand of many investors,” he said. The 15 trillion yen in emergency funding was the largest ever conducted by the bank, the bank said.

The bank also decided to increase the amount of its asset buying fund by about 5 trillion yen to a total of 40 trillion yen, it said in a statement issued after a monthly meeting. After the quake, the bank “has been trying to gauge its effects on financial markets and financial institutions’ business operations, as well as taking all possible measures in order to maintain financial intermediation and secure settlement,” the bank said.

The bank voted unanimously to keep its key interest rate unchanged at 0 to 0.1% as was widely expected. Masaaki Shirakawa, the bank’s governor, said Sunday that the bank would do whatever it could to ensure anticipated power shortages would not affect Japan’s bank settlement system.

click to enlarge Standing knee deep in wreckage a local resident wearing a protective mask, surveys the devastation around him in Sendai City, Japan 13 March 2011 following the tsunami that hit the area after the earthquake on 11 March 2011. © EPA/STR