The U.S. Federal Reserve slashed interest rates in an emergency move and other central banks took similar aggressive steps to cushion the economic impact, but stock markets and the dollar continued to tumble on Monday.
Leaders of the G7 countries will hold a video conference on Monday to discuss a joint response to the coronavirus outbreak, officials have said.
The coordinated policy actions were reminiscent of the sweeping steps taken just over a decade ago to fight a meltdown of the global financial system, but this time the target is an entirely unfamiliar foe - a fast-spreading health crisis with no certain end in sight that is forcing entire societies to effectively shut down.
Several countries imposed bans on mass gatherings such as sporting, cultural and religious events to combat the disease that has infected over 160,000 people globally and killed more than 6,000. France and Spain joined Italy in imposing lockdowns on tens of millions of people while Australia ordered self-isolation of arriving foreigners.
New Zealand's central bank slashed interest rates by 75 basis points to a record low on Monday following an emergency meeting. The Bank of Japan said it will hold an emergency meeting on Monday, instead of the March 18-19 scheduled one.
The BOJ and four other central banks cut pricing on their swap lines to make it easier to provide dollars to their financial institutions facing stress in credit markets.
"This cannot prevent the economic fallout from social distancing," said Ray Attrill, head of FX strategy at National Australia Bank in Sydney, referring to a method being used by many countries to try slow the spread of the virus.
"That will require some fiscal spending and something from the government to make sure small companies are funded."
New York Mayor Bill de Blasio said on Sunday he was ordering restaurants, bars and cafes to only sell food on a take-out or delivery basis. He also said he would order nightclubs, movie theatres, small theatre houses and concert venues to close.
"These places are part of the heart and soul of our city," he said. "But our city is facing an unprecedented threat, and we must respond with a wartime mentality."
New York also joined the nation's other major public school systems in calling off classes starting this week.
Los Angeles Mayor Eric Garcetti issued similar orders later on Sunday. Any restaurant, bar or cafe selling food will only be able to do so via delivery or take-out, officials said.
Border closures
China, were the virus surfaced late last year, said industrial output contracted at the sharpest pace in 30 years in the first two months of the year as the disease disrupted the world's second-largest economy.
Nations in South and Central America ramped up measures to contain the infection, with Panama banning entry of non-resident foreigners and Honduras closing its borders to passenger traffic for a week.
The leaders of Argentina and Peru also announced border closures on Sunday to curb coronavirus. Argentina will close its borders for 15 days to non-residents, President Alberto Fernandez said in a televised press conference.
Public and private school classes would also be suspended until March 31, Fernandez said. National parks would be closed.
Peruvian President Martin Vizcarra said later on Sunday that Peru would also close its borders, suspending air and sea transport. He called on citizens to self-quarantine for 15 days to help slow the infection.
The U.S. containment measures have so far been mild compared to the nationwide lockdowns imposed in Italy, France and Spain. However, Ohio and Illinois on Sunday ordered all bars and restaurants to close, although carry-out and delivery are still allowed.
Such measures were not enough to calm skittish investors. On Monday, E-mini futures for the S&P 500 index fell 4.77% to their daily trading limit outside the United States.
MSCI's index of Asia-Pacific shares outside Japan slid 2.4% to lows not seen since early 2017, while the Nikkei eased 0.4%.
The dollar was last down 0.5% on the Japanese yen at 107.36, having fallen 1.7% earlier in the day.
"It may be a shot in the arm for risk assets and help to address liquidity concerns ... however, it also raises the question of whether the Fed has anything left in the tank should the spread of the virus not be contained," said Kerry Craig, global market Strategist at J.P. Morgan Asset Management.
"We really need to see the fiscal side ... to prevent a longer than needed economic slowdown."
