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Tokyo stocks hammered, BoJ unleashes record funds

People using temporary phones set up for residents at the Natori City Hall in Natori, Miyagi Prefecture yesterday three days after an 8.9-magnitude earthquake and resulting tsunami hit the region. Economists say it is still too early to assess the cost of the destruction from the record magnitude quake and the 10-metre wall of water that laid waste to swathes of the northeastern coast and triggered an atomic emergency. Photo: Toru Yamanaka/AFP

People using temporary phones set up for residents at the Natori City Hall in Natori, Miyagi Prefecture yesterday three days after an 8.9-magnitude earthquake and resulting tsunami hit the region. Economists say it is still too early to assess the cost of the destruction from the record magnitude quake and the 10-metre wall of water that laid waste to swathes of the northeastern coast and triggered an atomic emergency. Photo: Toru Yamanaka/AFP

Japanese stocks tumbled yesterday and the central bank pumped a record amount of cash in a bid to soothe money markets shaken by Japan’s biggest ever earthquake, a devastating tsunami and a nuclear emergency.

Nuclear plant operator Tepco dived almost 24 per cent on fears of a meltdown at one of its reactors while producers such as Sony and Toyota tumbled as power shortages prompted blackouts and factories remained closed, hurting production.

The Bank of Japan said it would pump a record 15 trillion yen ($184 billion) to help stabilise the short term-money market, making good on its pledge Sunday that it would unleash “massive” funds following the quake.

An additional 6.8 trillion yen will be deployed between today and tomorrow, including three trillion in bond purchases, bringing the total available to 21.8 trillion yen.

The BoJ will also double a five trillion yen asset purchase scheme to help buffer the economy from Japan’s strongest ever quake, and left its key rate left at between zero and 0.1 per cent.

But the move provided little relief for unnerved traders, with another explosion at Tokyo Electric Power’s (Tepco) Fukushima Number One nuclear plant helping push the index lower as economists eyed the impact on Japan’s growth.

“Shares will be dragged down with Japan’s March GDP figures expected to be sharply lower on a slump in economic activity, delays in distribution of goods on power cuts and loss of human lives,” Shoji Hirakawa of UBS said.

Tokyo stocks plunged 6.18 per cent Monday with the key Nikkei index tumbling below 10,000 to 9,620.49 as top Japanese firms suspended operations.

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