TOKYO, March 2 (Reuters) - Japanese shares staged a mild rebound in choppy trading on Monday as investors pinned their hopes on a coordinated monetary policy response from major central banks to offset the hit to the global economy from a fast-spreading coronavirus.
The benchmark Nikkei average slid as much as 1.5% to 20,834.29, its lowest since Sept. 5, but reversed course to gain 1.1% by the midday break after the Bank of Japan Governor Haruhiko Kuroda pledged to take steps to stabilise markets.
The central bank will monitor the developments carefully and offer sufficient liquidity via market operations and asset purchases, Kuroda said in an emergency statement.
On Friday, Federal Reserve Chairman Jerome Powell issued a statement and said that the U.S. central bank was ready to support the economy.
The Nikkei’s volatility index, a measure of investors’ volatility expectations based on option pricing, rose to a four-year high of 47.96, before dropping sharply to 36.
The broader Topix also ended the morning session 1.1% higher at 1,527.61, showing a solid rebound following Kuroda’s statement.
All but three of the 33 sector sub-indexes on the Tokyo Stock Exchange were trading higher, with fish and forestry , services and real estate the top three performers.
The index of Mothers startup shares rebounded 6.1%, after plunging 6.3% to hit a fresh 4-year trough on Friday.
Cyclical stocks that suffered sharp falls on Friday outperformed the overall markets, with semiconductor-related Tokyo Electron Ltd and Advantest Corp climbing 4.4% and 5.2%, respectively, while Sony Corp gained 3.8%.
Bucking the trend, Yaskawa Electric Corp slipped 0.6% after surprisingly weak Chinese data pointed to slower growth in the world’s second-largest economy, a big market for the Japanese company.
The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) tumbled to 40.3 in February, the lowest level since the survey began in 2004, while China’s official Purchasing Managers’ Index (PMI) fell to a record low of 35.7 last month. (Reporting by Tomo Uetake; Editing by Sriraj Kalluvila)