Total 28 out of 33 industry categories of Topix index declined, with Services, Real Estate, Pharmaceutical, Information & Communication, Iron & Steel, and Electric Appliances issues being notable losers.
The coronavirus outbreak, which originated in China, has cast a shadow over the global economic outlook, prompting investors to flee to the perceived safety of the yen and, in turn, weighing on shares of Japanese exporters, the main engine of the country's economy. The disease has infected at least 113,851 and taken more than 4,000 lives so far, according to the latest figures from the World Health Organization.
The Bank of Japan is planning to increase its purchases of exchange-traded funds by lifting the annual target of 6 trillion yen ($57 billion) as part of its radical monetary easing program. The BOJ will hold a policy meeting March 18 and 19 to discuss the possibility of increasing its ETF purchases, which would be the bank's first decision on additional monetary easing in more than three years.
The widespread view is that the BOJ would be forced into additional easing at the upcoming meeting, following an emergency rate cut last week by the U.S. Federal Reserve that led to an unwanted surge in the yen against the dollar and other major currencies.
While the Fed is expected to discuss further rate cuts at its two-day meeting from March 17, investors have also priced in a rate cut by the European Central Bank at its meeting Thursday in response to the viral outbreak, a decision that could add to pressure on the BOJ to follow suit. BOJ Gov. Haruhiko Kuroda pledged last week that the central bank will make every effort to ensure stability in financial markets.
CURRENCY NEWS: The Japanese yen, often seen as a save-haven in times of economic uncertainty, traded at 104.68 per dollar after touching an earlier low of 105.67.
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