The Japanese stock market indices continue to decline as Nikkei lost more than 750 points since morning. The losses amounted to more than 10% since the Chinese stock markets have been closed for New Year celebrations. The yen has been appreciating against the dollar in recent days, while the BoJ's move to adopt negative interest rates did not have negative impact on the yen.

Japan's Fin Minister Taro Aso stated that the authorities were prepared to take appropriate measures in response to the recent exchange rate movement; however, he referred to the price moves as volatile. Market speculation about the BoJ's interventions to weaken the yen is not surprising as the currency has appreciated over the past weeks amid global financial markets turbulence. Under such circumstances, it seems unlikely that the central bank would be able to tackle the appreciation pressure using other measures.