IOC Emergency Council Meeting Held, Tokyo Olympics Canceled? "Highlights and Event Schedule for March 17"

Yesterday was the start of a turbulent week with emergency rate cuts announced by the Fed, RBNZ, and the Bank of Japan.

When the Bank of Japan announced a doubling of ETF purchases, the Nikkei rose briefly but fell again within five minutes.

After entering European and U.S. markets, global stock prices continued to decline, with the Dow and the S&P 500 triggering circuit breakers for the third time this year.

The Dow fell more than 3,000 points at one point, and finished down 2,997 points, recording the largest one-day drop on record.

It is believed that the measures such as travel bans, entry restrictions, requests to close stores, and calls for people to stay home, mainly in Europe and the United States, contributed to the situation.

◎ Today's Points of Focus

1) Each country's response to the coronavirus

Yesterday, the Fed, the Bank of Japan, and the RBNZ took emergency rate cuts and implemented substantial QE expansion, yet global stock prices declined and the Dow recorded its largest drop in history.

There are limits to monetary policy evident.

Therefore, attention is likely to shift to fiscal policy from here.

In particular, there is strong focus on whether measures can be put in place to revive the slowing economic activity (demand).

Another factor behind the stock price decline is that at the G7 summit, leaders pledged to cooperate against coronavirus, and measures such as travel bans, border closures, and store closures were announced, raising concerns about further economic stagnation.

If such coordinated actions spread, further stock price declines are expected.

Today, too, it will be important to watch how each country responds to the coronavirus.

2) IOC Extraordinary Board Meeting

Today, the IOC (Olympic Committee) and experts are gathering for an extraordinary board meeting.

Since the meeting is being held on an extraordinary basis, there is speculation that some decision regarding the Tokyo Olympics will be announced.

If the Tokyo Olympics are canceled or postponed, it is expected to impact the Japanese economy and stock prices.

I will be watching today’s decision closely.

3) Presidential Primaries

Democratic presidential primaries will be held in four states in the United States.

Although attention has waned due to the coronavirus, once the situation settles, the presidential election will become the next focus, so I want to keep an eye on it from now.

If the economy deteriorates in a presidential election year, the odds of re-election for the incumbent president may be lowered, which could put Donald Trump’s re-election in doubt.

When Trump’s re-election looks uncertain, who will be the Democratic nominee becomes crucial.

The Democrats are led by Biden, but with the coronavirus raising questions about universal health care, Sanders may stage a comeback and potentially overtake.

◎ Today's Event Schedule

Tuesday, March 17

Presidential primaries in four states

09:30 AUDRBA minutes

18:30 GBPUK unemployment rate / average earnings

19:00 EUR Germany ZEW Economic Sentiment

19:00 EUR Euro area ZEW Economic Sentiment

19:00 EUR Lane-Finland central bank governor speech

21:30 USDUS retail sales

Wednesday, March 18

06:45 NZD NZ current account

08:50 JPY Japan trade balance

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