Asian stock markets plunged in early trade Friday following massive losses on Wall Street amid fears over the Greek debt crisis.
Japan’s benchmark Nikkei 225 stock average dropped 400.06 points, or 3.7 percent, to close the morning session at 10,295.63.
“Investors are worried that the Greek debt problem could spread to other European countries, like Spain and Portugal,” said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd. “They are not so sure that the European Union alone can contain the spreading financial crisis,” he said.
With the Greek crisis hammering global financial markets, the Bank of Japan said Friday it will offer two trillion yen ($22 billion) in short-term loans to commercial banks to boost liquidity.
“We would like to ensure stability in financial markets by providing ample funds to banks,” Bank of Japan official Yuichi Adachi said.
South Korea’s Kospi dropped 2.9 percent to 1,636.51, while Australia’s benchmark lost 2.1 percent Friday.
China’s benchmark Shanghai index tumbled 2.4 percent in early trade, with shares in Taiwan, Singapore and New Zealand all falling sharply.
Investors dumped shares across the board in Asia after the Dow Jones industrials plunged 1,000 points at one point Thursday — the biggest drop ever during a trading day — on fears that Greece’s debt problems could halt the global economic recovery.
Apart from Greece’s debt crisis, a simple typographical error may also have contributed to the massive U.S. selloff, and the Securities and Exchange Commission said it was reviewing what happened. The Dow later recovered some of its earlier losses, closing at 10,520.32, down 3.2 percent.
“The root cause for the massive selloff worldwide is fears that Greece’s debt crisis could spread to other euro-zone economies,” said Kazuhiro Takahashi, equity strategist at Daiwa SMBC Securities Co. Ltd.
In currencies, the dollar was quoted at 91.57 yen in Tokyo on Friday, up from 90.53 yen in New York late Thursday. The dollar plunged to 87.95 yen in New York Thursday at one point.