BoJ pledges support,Toyota halts output at some plants

Japan’s central bank pledged to ensure financial stability after the strongest earthquake in at least a century forced Toyota to shut some plants, knocked out oil refineries and sparked a plunge in stocks.

The disaster may curb Japan’s recovery from an economic slump in the fourth quarter as Prime Minister Naoto Kan struggles to convince investors about his ability to tackle the world’s largest public-debt burden. While the Finance Ministry said it’s too soon to gauge the quake’s economic impact, the Nikkei 225 Stock Average dropped 1.7 per cent. The price of crude oil fell 2 per cent to $100.65 per barrel.

The Bank of Japan (BoJ), which has already cut its benchmark rate to zero in an effort to end deflation, set up an emergency task force and said it will do everything to provide liquidity. The central bank said its settlement system was working and that it was able to settle all accounts without disruption.

“I call on citizens to act calmly,” Kan told reporters in Tokyo after convening his emergency disaster response team. He also declared a state of “nuclear emergency,” Kyodo News reported, citing Chief Cabinet Secretary Yukio Edano.