Japan Govt, BOJ Exchange Views on Stock Sell-Offs

December 21, 2018

Tokyo--Senior officials of the Japanese government and the Bank of Japan on Thursday exchanged views on recent financial market instability, including stock sell-offs.

"We're concerned about recent large fluctuations (in stock prices)," Masatsugu Asakawa, vice finance minister for international affairs, told reporters after the meeting. "We'll keep a close watch on financial market developments with a sense of tension," he added.

Behind the stock market tumbles in and outside Japan are concerns about a global economic slowdown amid trade tensions between the United States and China, the biggest and second-biggest economies in the world, according to market sources.

On the Tokyo Stock Exchange on Thursday, the key 225-issue Nikkei average finished down 595.34 points, or 2.84 pct, from Wednesday at 20,392.58, its lowest closing in about 15 months. It lost more than 700 points briefly.

The government and the BOJ hold a meeting of senior officials every three months for discussions on economic and financial market trends.

Participants in Thursday's meeting included Asakawa, Financial Services Agency Commissioner Hidetoshi Endo and BOJ Executive Director Eiji Maeda.

On major equity markets' recent weakness, Asakawa said, "Stock prices reacted overly to some weak economic indicators in the United States and China." Still, he stressed that there is no change in the world economy's recovery trend.

But Asakawa also said that there are an increasing number of factors requiring close attention, citing impacts of the U.S. Federal Reserve's rate hike campaign on emerging economies and developments in the Chinese economy, which is showing signs of a slowdown, as well as the U.S.-China trade friction.

"Downside risks are becoming greater than before," Asakawa cautioned. Jiji Press