JAPAN to Act as Nikkei Suffers Worst Day Since Black Monday

by Christina 123 | October 8, 2008 at 03:28 pm

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JAPAN's Prime Minister Taro Aso is ready to take action today, as the NIKKEI Index plunged into freefall finishing 9.4% down on Wednesday. Mr. Aso described the nosedive as, "frankly, beyond our imagination."

This was the worst day on the south East Asian markets since "Black Monday" of 1987.

The benchmark Nikkei average fell 9.4 per cent, the biggest one-day fall since the 1987 stock market crash. There were steep declines elsewhere in Asia, including an 8.3 per cent fall in Bangkok and 8.2 per cent in Hong Kong, while Indonesia halted trading after the Jakarta Composite Index dropped by more than 10 per cent for the second time this week.
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Mr Aso said that although Japan’s financial system was stable, the global financial turmoil meant there would be damage to the real economy. “It will become necessary to take measures to deal with domestic demand,” he said.

His comments came as the lower house of the Diet passed a Y1,800bn ($18bn) supplementary budget as part of a Y11,700bn economic stimulus package.

“Anybody can see that the impact [of the supplementary budget] is limited since measures that will affect growth directly in the short term are not included,” said Tetsufumi Yamakawa, director of Japan economic research at Goldman Sachs in London