Japan will need to take further action to protect its economy from the impact of the global financial crisis, prime minister Taro Aso said yesterday, after stocks in Tokyo plunged to depths he described as 'frankly beyond our imagination'.

The benchmark Nikkei average fell 9.4%, the biggest one-day fall since the 1987 stock market crash. There were steep declines elsewhere in Asia, including an 8.3% fall in Bangkok and 8.2% in Hong Kong, while Indonesia halted trading after the Jakarta Composite Index fell by more than 10% for the second time this week.

'Japan’s financial system itself is stable but [due to the financial crisis] there will be an impact on the real economy. It will become necessary to take measures to deal with domestic demand,' said Aso.

Financial Times