In this March 12, 2020, photo, Bank of Japan Gov. Haruhiko Kuroda speaks to reporters after the talks with Japanese Prime Minister Shinzo Abe at the prime minister's official residence in Tokyo. The Bank of Japan has convened an emergency policy meeting Monday, March 16 after the U.S. Federal Reserve cut its key interest rate to 0.25%. (Kyodo News via AP)

TOKYO - The Bank of Japan has convened an emergency policy meeting after the U.S. Federal Reserve cut its key interest rate to 0.25% to combat the blow to the economy from the virus outbreak.

Bank of Japan Gov. Haruhiko Kuroda called the meeting for Monday instead of Wednesday and Thursday as originally planned.

A BOJ statement said the meeting was “to discuss monetary control matters based on recent economic and financial developments."

The BOJ cut its key policy rate to minus 0.1% several years ago as part of a massive, prolonged effort to use cheap credit to keep the economy growing. It also purchases tens of billions of dollars' worth of Japanese government bonds and other assets to help put more cash into the markets.

The unprecedented levels of “qualitative and quantitative easing," helped Japan end a long spell of deflation but did not boost growth as much as expected. With an aging and shrinking population, Japan faces an uphill battle in getting companies to invest in domestic manufacturing or boost wages. But the jobless rate has remained low because the number of workers is also on the decline.

Japan's Nikkei 225 index was the sole Asian benchmark that did not lose ground early Monday, but by early afternoon it, too, was slightly lower. Many other regional markets sank more than 3%. Australia's S&P/ASX 200 plunged 7.5%. India's benchmark dropped 5% at the open.

Japan's economy, the world's third largest, contracted at a 7.1% annual pace in the last quarter and is expected to shrink further in this quarter given the shock from the coronavirus outbreak.

Early Monday, the BOJ, Bank of Canada, Bank of England, European Central Bank, Federal Reserve, and Swiss National Bank announced a co-ordinated plan to increase cash in the markets using U.S. dollar “liquidity swap line arrangements," offering U.S. dollars weekly in each jurisdiction with an 84-day maturity on top of the usual measures.

Apart from slashing the U.S. benchmark interest rate to near zero, the Federal Reserve said it was buying $700 billion in bonds to help smooth disruptions in the Treasury market.

The surprise intervention reflected that the Fed views the economy as being on the brink of recession and has signalled it will do all it can to minimize the blow to households, companies and the markets.

News from © The Associated Press, 2020