TOKYO, March 2 (Reuters) - Japanese shares rebounded 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 finished 1% higher at 21,344.08 points, after five sessions of decline. It slid as much as 1.5% to its lowest since Sept. 5 earlier in the day before markets recouped 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 38.7.
The broader Topix ended up 1.0% at 1,525.87 as Kuroda’s statement helped to curtail the safe-haven yen’s earlier gains and provided a tailwind for broad-based Japanese stocks.
About four-fifths of the 33 sector sub-indexes on the Tokyo Stock Exchange were trading higher, with services, fish and forestry and retailer becoming the top three performers.
The index of Mothers startup shares rebounded 5.8%, 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 4.5% and 5.0%, respectively, while Sony Corp gained 4.0%.
Bucking the trend, Yaskawa Electric Corp slipped 0.4% after surprisingly weak Chinese manufacturing activity surveys 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.
Elsewhere, Rakuten Inc dropped 1.3% as Japan’s Fair Trade Commission recommended a Tokyo court order the e-commerce firm to halt the introduction of free shipping after the market closed on Friday. (Reporting by Tomo Uetake; Editing by Sriraj Kalluvila and Jacqueline Wong)