“Japan’s economy has been in an increasingly severe situation due to the impact of the spread of the novel coronavirus,” the central bank said in a statement, noting that policy responses so far have had “some positive effects” but the flow of credit to companies remains strained.
Investor insight: The move pushed up Japan’s Nikkei 225 by 2.7% while lending support to other markets in Asia. European stocks also opened higher.
Ongoing concerns about the global economy and the health of financial markets set the tone for the week, which will also include a meeting of the Federal Reserve and the European Central Bank.
Up next: The Fed is scheduled to make a policy announcement on Wednesday. Most analysts don’t expect it to add any fresh policy changes to the mix, having acted aggressively over the past two months.
But investors will pay close attention to what Federal Reserve Chair Jerome Powell says about the state of the economy, especially as the United States mulls when to reopen parts of the country.
“The new facilities to support credit market functioning appear sufficient for now, though Powell will likely emphasize that the Fed is ready to intervene further if the need arises,” Jan Hatzius, the chief economist at Goldman Sachs, told clients.
On the radar: The central bank is also not expected to take up any new measures, but may signal its intent to scale up its bond-buying program when it meets again in June.
The world’s largest car plant carefully restarts production
Why it matters: The company has introduced at least 100 changes to the way its plants operate as it tries to restart business gradually without risking the health of hundreds of thousands of workers.
Its experience underscores the daunting task ahead for manufacturers as they slowly return to factories in a world still reeling from the coronavirus pandemic.
Volkswagen’s gigantic Wolfsburg plant is where the iconic Beetle was produced for more than three decades and where the automaker’s bestselling models, the VW Golf series and the Tiguan, are made today.
The plant shut on March 19 as the novel coronavirus tore through Europe, prompting carmakers to halt production across the continent after borders were closed and national lockdowns were imposed. Its reopening is symbolic of wider efforts to kickstart economies in Europe, where some 14 million people work in jobs connected to the automobile sector.
Huge challenge: The reopening involves ramping up of a supply chain spanning 71 countries and more than 2,600 companies at a challenging time for businesses all over the world.
It has put in place 100 different health and safety measures, agreed with its workers, with information displayed on more than 8,000 posters at the plant, and explained in booklets.
Wolfsburg will restart production on a one-shift basis, with 8,000 people who work on the production line reporting to the plant on Monday out of the usual 20,000.
US oil is plunging again on storage fears
US oil prices are tumbling again on Monday. West Texas Intermediate futures, the American benchmark, plunged nearly 17% to $14.07 a barrel — a rough start to the week as tumult in the market continues.
“The market knows that the storage problem remains and we are on a calculated path to reach tank tops in weeks,” Bjornar Tonhaugen, head of oil markets at Rystad Energy, told clients Monday. “Prices can’t do else but decline when producers won’t have anywhere to store oil soon.”
The price pressure is expected to spark a wave of shutdowns as producers try to rebalance a market grappling with excess supply and extremely limited demand. The number of US oil rigs fell to 378 as of Friday, with 60 rigs shutting last week alone, according to a closely-watched count by energy services company Baker Hughes. The count is down 53% compared to the same week last year.
Corporate impact: Rig contractor Diamond Offshore Drilling filed for bankruptcy in Texas on Sunday, saying that conditions have “worsened precipitously in recent months.”