News / Asia

    Global Market Turmoil Triggers Tumult in Tokyo

    People walk past an electronic stock board showing Japan's Nikkei 225 in Tokyo, Friday, Feb. 12, 2016.
    People walk past an electronic stock board showing Japan's Nikkei 225 in Tokyo, Friday, Feb. 12, 2016.

    Speculation rose Friday that the Bank of Japan would call an emergency meeting prior to its next scheduled session in mid-March amid a surging yen and plunging equity prices.

    Observers are saying the central bankers might push interest rates even further below zero and expand an asset purchase program that already totals about $710 billion (80 trillion yen) annually.

    Japan’s benchmark stock index, the Nikkei 225, fell to a 16-month low Friday, down 760 points; a drop of more than 4.8 percent for the day. The index has shed nearly 2,000 points since early Tuesday – an 11 percent drop.

    The broader TOPIX index fell more than 5.4 percent Friday amid continuing gloom about the global economic situation and a rising Japanese currency, which hurts the country’s exporters.

    The U.S. dollar dipped to the 110-yen level before recovering slightly, giving the Japan currency a gain in value against the greenback of nearly 10 percent since the Japanese central bank took interest rates below zero at the end of last month – a bold move that stunned investors.

    Shares in Japanese financial institutions led Friday’s losses.  Financial shares also led declines Friday in Australia and Hong Kong.

    Market analysts in Tokyo interpreted the trading turbulence as a reflection of concerns about a global slowdown and the possibility of recession in the world’s largest economy, the United States. That has investors shedding equities and fleeing to the safe havens of government bonds, gold and the Japanese currency.

    Finance Minister Taro Aso warned that Japan would not hesitate to “to act appropriately” to slow a surging yen, saying his ministry was watching the currency market with “a sense of tension.”

    FILE - Japanese Finance Minister Taro Aso.
    FILE - Japanese Finance Minister Taro Aso.

    The yen is expected to be on the agenda when G20 finance leaders meet later this month in Shanghai.

    “We have to look at ways we can promote policy coordination heading into the G20 meeting,” Deputy Vice Finance Minister Masatsugu Asakawa told reporters.

    Prime Minister Shinzo Abe on Friday met during the trading day with central bank governor Haruhiko Kuroda, who denied that the Tokyo market’s nosedive this week is a result of the Bank of Japan’s (BOJ) negative interest rate policy, but rather “excessive risk aversion” among global investors.

    Kuroda told reporters he did discuss with Abe the world economy and the market moves, but there was “no particular comment from the prime minister” on monetary policy.

    The mere action of Kuroda going to the prime minister’s office slightly eased investors concerns, helping to take the Tokyo Stock Exchange off its low point for the day, according to Maki Sawada of Nomura Securities’ investment research department.

    Sawada added her voice to the chorus of specialists in Tokyo that the BOJ would soon convene an emergency meeting amid “shaky confidence caused by a dim outlook for markets around the world the world.”

    Meanwhile, the top government spokesman on Friday declared Japan’s economic fundamentals are sound.

    Despite the huge drop for share prices here in recent days when “looking at the actual economy, company earnings are among the best ever seen and the Japanese economy is stable,” said Chief Cabinet Secretary Yoshihide Suga.

    Japan’s economy, the world’s third largest, has been in a funk ever since its bubble burst in the early 1990s.

    For the past three years, Abe has pushed fiscal stimulus, monetary easing and structural reforms – the three arrows of “Abenomics” - with little to show for the effort.

    Critics have called for much bolder reforms, but opponents warn of the risk to social cohesion if Japan were to see mass layoffs and an influx of cheaper labor from abroad.


    Steve Herman

    A veteran journalist, Steve Herman is VOA's Southeast Asia Bureau Chief and Correspondent, based in Bangkok.

    You May Like

    Video Obama Remembers Fallen Troops for Memorial Day

    President urges Americans this holiday weekend to 'take a moment and offer a silent word of prayer or public word of thanks' to country's veterans

    Upsurge of Migratory Traffic Across Sahara From West to North Africa

    A report by the International Organization for Migration finds more than 60,000 migrants have transited through the Agadez region of Niger between February and April

    UN Blocks Access to Journalist Advocacy Group

    United Nations has rejected bid from nonprofit journalist advocacy group that wanted 'consultative status,' ranking that would have given them greater access to UN meetings

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Chinese-Americans Heart Trump, Bucking National Trendi
    X
    May 27, 2016 5:57 AM
    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Chinese-Americans Heart Trump, Bucking National Trend

    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Reactions to Trump's Success Polarized Abroad

    What seemed impossible less than a year ago is now almost a certainty. New York real estate mogul Donald Trump has won the number of delegates needed to secure the Republican presidential nomination. The prospect has sparked as much controversy abroad as it has in the United States. Zlatica Hoke has more.
    Video

    Video Drawings by Children in Hiroshima Show Hope and Peace

    On Friday, President Barack Obama will visit Hiroshima, Japan, the first American president to do so while in office. In August 1945, the United States dropped an atomic bomb on the city to force Japan's surrender in World War II. Although their city lay in ruins, some Hiroshima schoolchildren drew pictures of hope and peace. The former students and their drawings are now part of a documentary called “Pictures from a Hiroshima Schoolyard.” VOA's Deborah Block has the story.
    Video

    Video Vietnamese Rapper Performs for Obama

    A prominent young Vietnamese artist told President Obama said she faced roadblocks as a woman rapper, and asked the president about government support for the arts. He asked her to rap, and he even offered to provide a base beat for her. Watch what happened.
    Video

    Video Roots Run Deep for Tunisia's Dwindling Jewish Community

    This week, hundreds of Jewish pilgrims are defying terrorist threats to celebrate an ancient religious festival on the Tunisian island of Djerba. The festivities cast a spotlight on North Africa's once-vibrant Jewish population that has all but died out in recent decades. Despite rising threats of militant Islam and the country's battered economy, one of the Arab world's last Jewish communities is staying put and nurturing a new generation. VOA’s Lisa Bryant reports.
    Video

    Video Meet Your New Co-Worker: The Robot

    Increasing numbers of robots are joining the workforce, as companies scale back and more processes become automated. The latest robots are flexible and collaborative, built to work alongside humans as opposed to replacing them. VOA’s Tina Trinh looks at the next generation of automated employees helping out their human colleagues.
    Video

    Video Wheelchair Technology in Tune With Times

    Technologies for the disabled, including wheelchair technology, are advancing just as quickly as everything else in the digital age. Two new advances in wheelchairs offer improved control and a more comfortable fit. VOA's George Putic reports.
    Video

    Video Baby Boxes Offer Safe Haven for Unwanted Children

    No one knows exactly how many babies are abandoned worldwide each year. The statistic is a difficult one to determine because it is illegal in most places. Therefore unwanted babies are often hidden and left to die. But as Erika Celeste reports from Woodburn, Indiana, a new program hopes to make surrendering infants safer for everyone.
    Video

    Video California Celebration Showcases Local Wines, Balloons

    Communities in the U.S. often hold festivals to show what makes them special. In California, for example, farmers near Fresno celebrate their figs and those around Gilmore showcase their garlic. Mike O'Sullivan reports that the wine-producing region of Temecula offers local vintages in an annual festival where rides on hot-air balloons add to the excitement.
    Video

    Video US Elementary School Offers Living Science Lessons

    Zero is not a good score on a test at school. But Discovery Elementary is proud of its “net zero” rating. Net zero describes a building in which the amount of energy provided by on-site renewable sources equals the amount of energy the building uses. As Faiza Elmasry tells us, the innovative features in the building turn the school into a teaching tool, where kids can't help but learn about science and sustainability. Faith Lapidus narrates.

    Special Report

    Adrift The Invisible African Diaspora