The Japanese government and central bank said Monday that they would act appropriately to prevent volatile markets from weakening economic activities and to regain market stability after Tokyo stocks plummeted and the yen surged sharply on coronavirus concerns.

Bank of Japan Governor Haruhiko Kuroda said financial markets remain unstable and the central bank is prepared to respond to market uncertainty "without hesitation."

The comment came as speculation grew in the foreign exchange market that Japanese authorities could move to stem the yen's sharp appreciation. A stronger yen undermines the price competitiveness of Japan-made products overseas and reduces profits earned abroad when repatriated.

"We will make every effort to provide ample liquidity and ensure stability in financial markets" through bond-purchase operations and increased buying of exchange traded funds, Kuroda told a parliamentary committee session.

Amid growing concern that the new coronavirus could have a significant global economic impact, the dollar plunged to the mid-101 yen range earlier in the day, its lowest level since November 2016, as the Japanese currency attracted strong buying as a safe-haven asset.

The 225-issue Nikkei Stock Average ended Monday down 5.07 percent at a 14-month low on coronavirus fears and concern over plunging oil prices.

"Some nervous moves can be seen in the foreign exchange and stock markets, so we'll have to keep monitoring closely for a while," Finance Minister Taro Aso told reporters. He declined to comment on the possibility of Japan stepping into the currency market in what would be the first intervention since November 2011.

(Japanese Finance Minister Taro Aso speaks to reporters in Tokyo on March 9, 2020.)

The volatility prompted senior officials of the Finance Ministry, the Financial Services Agency and the BOJ to call an emergency meeting in the afternoon, the second in two weeks.

"Excessive market movements are undesirable for the real economy," Yoshiki Takeuchi, vice finance minister for international affairs, told reporters after the meeting.

He said the government was ready to take action to mitigate any negative effects from the epidemic.

The coronavirus outbreak could not have come at a worse time for Japan's economy, which shrank an annualized real 7.1 percent in the October-December quarter, according to government data released Monday, a deeper contraction than the initial reading of a 6.3 percent contraction.

Speaking during the same parliamentary committee session as Kuroda, Prime Minister Shinzo Abe vowed to implement "necessary and sufficient" economic and fiscal policy when necessary.

Related coverage:

Tokyo stocks plunge, yen surges in morning on deeper coronavirus fears

Japan local gov'ts urged to prepare for peak of coronavirus infections

South Korea rations face masks as virus cases near 7,400