Tokyo pharma stocks in week to Monday March 19, 2001

The Tokyo stock market opened with a sharp retreat in the week to March19, led by heavy losses in global equity markets. However, the market rebounded mid-week, triggered by remarks from Japan's Finance Minister and the govenor of the Bank of Japan on policy measures to revitalize the market. The Nikkei 225 closed the week with a 0.2% gain, recovering from Tuesday's below-12,000 level, the lowest in 16 years. The Topix index dipped only 0.5%.

The Finance Minister commented that public funds could be used to cover losses incurred by the proposed private-sector fund for purchasing equities from corporations. Also, the BoJ's governor suggested a further easing of monetary policy in view of the fact that the economy is in a state of deflation, with two-year consecutive declines in consumer and wholesale prices. In fact, at the end of the week, the BoJ's Policy Board decided on quantitative credit easing steps to provide increased funds to the financial market.

This policy is expected to lower the overnight call rate to zero, representing the virtual revival of "zero-interest-rate" policy. In response, financial stocks were bought, while technology issues continued to meet selling pressure in view of the further retreat of the US Nasdaq. The market waits to see implementation of the concrete measures in the emergency economic package proposed in the previous week.