March 11, 2020 / 3:21 AM / a month ago

Nikkei down but Topix flat as virus fears persist

SYDNEY, March 11 (Reuters) - Japanese shares wobbled on Wednesday as investors remained worried about the coronavirus epidemic and weighed stimulus packages from governments and central banks to ease economic strains caused by the outbreak.

The Nikkei average fell 0.8% to 19,707.63 by the midday break after briefly flirting in positive territory, but was off a three-year low of 18,891.77 touched the previous day.

The Nikkei’s volatility index, a measure of investors’ volatility expectations based on option pricing, remained elevated at 45.69, not far from a 4-year peak of 48.89 brushed on Monday.

The broader Topix was flat at 1,406.22, reversing course after rising as much as 1.1% earlier.

Yet, two-thirds of the 33 sector sub-indexes on the Tokyo Stock Exchange traded higher, with fishing and forestry , electric and gas and sea transport being the top three performing sectors.

In the United States, the Centers for Disease Control and Prevention reported on Tuesday 696 cases of coronavirus, an increase of 224 from its previous count, and said the number of deaths had risen by six to 25.

Also, U.S. President Donald Trump said he would ask Congress for a payroll tax cut and other “very major” stimulus moves, although the details remained unclear.

As U.S. Treasury yields rose from all-time lows overnight, rate-sensitive J-REITs and banks outperformed, with the TSE REIT index climbing 2.2%, while Mitsubishi UFJ Financial Group Inc and Sumitomo Mitsui Financial Group Inc added 2.1% and 2.0%, respectively.

On the currency front, the dollar resumed its descent against the safe-haven yen, last trading around 105 yen, providing a tailwind for automakers as a weaker local currency boosts corporate profits when they are repatriated.

Nissan Motor Co Ltd gained 2.8%, Mitsubishi Motors Corp advanced 2.5% and Honda Motor Co Ltd rose 1.4%.

Talks that the Bank of Japan may expand monetary stimulus next week by pledging to buy exchange-traded funds (ETFs) faster than the current pace supported investor sentiment, traders said. (Reporting by Tomo Uetake; Editing by Subhranshu Sahu)

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