Bank of Japan Governor Haruhiko Kuroda said on Monday the central bank will take necessary steps to stabilize markets jolted by the coronavirus outbreak, bolstering speculation about coordinated global policy action.

Kuroda’s comments, made in an emergency statement just days after a similar move by Federal Reserve Chair Jerome Powell, were welcomed by markets as a signal that the world’s biggest central banks were mustering a coordinated policy response to the crisis.

Kuroda said financial markets have made “unstable movements” on heightening uncertainty over the impact on the economy from the epidemic.

“The BOJ will monitor developments carefully and strive to stabilize markets and offer sufficient liquidity via market operations and asset purchases,” he said.

The statement’s language suggested the BOJ will make full use of its existing tools to flood markets with funds, before pondering additional monetary easing steps.

In his own unscheduled statement issued on Friday, Powell said the Fed would “act as appropriate” to support the economy in the face of risks posed by the coronavirus epidemic.

Goldman Sachs’ economists Jan Hatzius and Daan Struyven said in a note that Powell’s statement “strongly hints” at a rate cut at or even before the Fed meets on March 17-18, as well as the likelihood of coordinated action.

“Chair Powell’s statement on Friday suggests to us that global central bankers are intensely focused on the downside risks from the virus,” Hatzius and Struyven said.

“We suspect that they view the impact of a coordinated move on confidence as greater than the sum of the impacts of each individual move.”

Kuroda’s comments reinforced that view. Stocks across the region turned higher after his statement was released, with Japan’s Nikkei giving up early losses to trade half a percentage point higher, and share markets in Hong Kong, South Korea and China rallying.

The rout in world stocks had deepened earlier on Monday, with investors rattled by weekend data from China that showed its fastest ever contraction in factory activity, raising fears of a global recession from the coronavirus.

The BOJ next meets for a rate review on March 18-19.

JAPAN FEARS RECESSION

The virus outbreak has heightened fears of recession in Japan as supply chain disruptions, slumping overseas tourist numbers and event cancellations hurt an already-fragile economy.

Prime Minister Shinzo Abe said the government will announce a second batch of measures around March 10 to prevent the spread of the virus and mitigate its damage to the economy.

Any steps, however, will not involve big fiscal spending as Abe has repeatedly said the government will tap its 270 billion yen ($2.50 billion) in budget reserves for now.

“We will carefully monitor developments and take steps without hesitation, as needed,” Abe said.

Japan has more than 940 virus cases, including 705 from the British-registered Diamond Princess cruise liner, which was quarantined near Tokyo this month, according to Japan Broadcasting Corp. (NHK).

Under a policy dubbed yield curve control, the BOJ guides short-term interest rates at minus 0.1 percent and pledges to cap long-term borrowing costs around zero. It also buys government bonds and risky assets, such as exchange-traded funds (ETF) as part of its massive stimulus program.

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