March 17, 2020 / 4:13 AM / 20 days ago

Nikkei down after Wall St plunge, but Topix up on more BOJ buying

SYDNEY, March 17 (Reuters) - Japan's Nikkei dipped on Tuesday after Wall Street saw the worst session since the 1987 Black Monday, but the broader market was higher as the central bank's pledge to buy risky assets lent support.

The overall sentiment, however, was fragile as lockdowns in Europe and the United States to combat the coronavirus' spread fanned fears of further economic pain from the pandemic that has battered global financial markets.

The benchmark Nikkei average ended the morning session 0.5% lower at 16,923.34 in choppy trade, having touched its lowest since November 2016 earlier in the session.

The Nikkei's volatility index, a measure of investors' volatility expectations based on option pricing, fell 5.3% to 57.43. However, it was not far from Monday's nine-year peak of 60.86.

The broader Topix was up 0.4% at 1,240.97 by the midday break, after earlier falling to 1,199.25, its lowest since June 2016.

Hopes that the Bank of Japan will buy more Exchanged Traded Funds (ETFs) supported the broader market's move, traders said.

The BOJ decided on Monday to buy ETFs at an annual pace of around 12 trillion yen ($113 billion), double the previous amount, until markets stabilise from the recent rout.

It will also double the pace of purchases for Japanese real-estate trust funds (J-REIT) to 180 billion yen per year, for the time being.

The self-isolation and quarantines due to the virus increased the appeal of gaming stocks and food makers, with Nintendo Co Ltd jumping 5.3%, while Nichirei Corp and Yamazaki Baking Co Ltd advanced 1.5% and 5.8%, respectively.

On the flip side, Japan Airlines Co Ltd declined 1.6%, dragged down by increasing government travel restrictions and plunging demand.

Elsewhere, Japan's top oil and gas company Inpex Corp slid 2.5% after crude oil futures fell below $30 a barrel on Monday.

$1 = 106.3600 yen Reporting by Tomo Uetake; Editing by Aditya Soni

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