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| Despite Leaders’ Assurances, ‘Brexit’ Leaves Markets Nervous | Despite Leaders’ Assurances, ‘Brexit’ Leaves Markets Nervous |
| (about 1 hour later) | |
| LONDON — As investors continued to fret over Britain’s vote to leave the European Union, markets resumed their downward march on Monday, despite assurances from world leaders that they were prepared for the fallout of a so-called Brexit. | LONDON — As investors continued to fret over Britain’s vote to leave the European Union, markets resumed their downward march on Monday, despite assurances from world leaders that they were prepared for the fallout of a so-called Brexit. |
| The pound fell to its lowest level against the dollar since 1985, down as low as $1.3152, following on from a sharp drop on Friday. British stocks were down 2.2 percent. Asian markets were more sanguine, however, with Japan’s benchmark stock index ending the day up 2.4 percent. | |
| Seeking safer havens, investors piled into British government debt, pushing the yield on the country’s main 10-year bond to its lowest-ever level. The price of gold soared. | Seeking safer havens, investors piled into British government debt, pushing the yield on the country’s main 10-year bond to its lowest-ever level. The price of gold soared. |
| Global authorities are trying to soothe investors, saying they are ready to intervene should the predictions of economic and financial havoc by a British exit from the 28-member bloc play out. | Global authorities are trying to soothe investors, saying they are ready to intervene should the predictions of economic and financial havoc by a British exit from the 28-member bloc play out. |
| George Osborne, the British chancellor of the Exchequer, and Prime Minister Shinzo Abe of Japan, have promised investors that they have the necessary resources and wherewithal to support their economies. Last week, Britain’s central bank governor, Mark J. Carney, announced he was prepared to unleash a further 250 billion pounds, or about $340 billion, to support lenders and the smooth functioning of markets. | George Osborne, the British chancellor of the Exchequer, and Prime Minister Shinzo Abe of Japan, have promised investors that they have the necessary resources and wherewithal to support their economies. Last week, Britain’s central bank governor, Mark J. Carney, announced he was prepared to unleash a further 250 billion pounds, or about $340 billion, to support lenders and the smooth functioning of markets. |
| But investors remain skeptical. One worry is that further rounds of central bank activism could compound the problems in the markets. Some economists have expressed concern that artificially low interest rates, spurred by central bank moves, have helped distort markets and create asset bubbles — and done little to encourage wage increases or to lift growth. | But investors remain skeptical. One worry is that further rounds of central bank activism could compound the problems in the markets. Some economists have expressed concern that artificially low interest rates, spurred by central bank moves, have helped distort markets and create asset bubbles — and done little to encourage wage increases or to lift growth. |
| The markets will probably be volatile for a while, as investors sort through the potential ramifications of Britain’s exit and the messy negotiations that are likely to follow. | The markets will probably be volatile for a while, as investors sort through the potential ramifications of Britain’s exit and the messy negotiations that are likely to follow. |
| Those worst hit on Monday were banks, which suffered from fears that Britain’s crucial financial sector could be badly affected by the country’s withdrawal. Trading in certain financial stocks such as Barclays and Royal Bank of Scotland were briefly suspended because of precipitous declines. | Those worst hit on Monday were banks, which suffered from fears that Britain’s crucial financial sector could be badly affected by the country’s withdrawal. Trading in certain financial stocks such as Barclays and Royal Bank of Scotland were briefly suspended because of precipitous declines. |
| “This is a historic moment, of the same magnitude as the fall of the Berlin Wall, and the full impact won’t be seen for years,” said Philippe Gijsels, of BNP Paribas Fortis in Brussels. “The market is very, very nervous.” | “This is a historic moment, of the same magnitude as the fall of the Berlin Wall, and the full impact won’t be seen for years,” said Philippe Gijsels, of BNP Paribas Fortis in Brussels. “The market is very, very nervous.” |
| Investors in Britain are hampered by the lack of any clear idea of what to expect, Mr. Gijsels said, adding, “I fear we’ll be in an extremely volatile market for some time to come.” | Investors in Britain are hampered by the lack of any clear idea of what to expect, Mr. Gijsels said, adding, “I fear we’ll be in an extremely volatile market for some time to come.” |
| For now, officials and policy makers will be hoping their words provide some measure of comfort. | For now, officials and policy makers will be hoping their words provide some measure of comfort. |
| Speaking before markets opened in Europe, Mr. Osborne said that while Britain’s public finances would be affected by an exit from the bloc, the broader economy was still in good shape. | Speaking before markets opened in Europe, Mr. Osborne said that while Britain’s public finances would be affected by an exit from the bloc, the broader economy was still in good shape. |
| “Our economy is about as strong as it could be to confront the challenge our country now faces,” he said. “It is inevitable, after Thursday’s vote, that Britain’s economy is going to have to adjust to the new situation we find ourselves in.” | “Our economy is about as strong as it could be to confront the challenge our country now faces,” he said. “It is inevitable, after Thursday’s vote, that Britain’s economy is going to have to adjust to the new situation we find ourselves in.” |
| “We were prepared for the unexpected,” he added. “We are equipped for whatever happens.” | “We were prepared for the unexpected,” he added. “We are equipped for whatever happens.” |
| Mr. Osborne had campaigned fiercely for Britain to remain in the European Union, and he had warned that leaving the bloc would require an emergency budget involving spending cuts and tax increases. But on Monday, he said that any such moves would have to wait until Britain had a new leader; Prime Minister David Cameron has said he will step down by October. | Mr. Osborne had campaigned fiercely for Britain to remain in the European Union, and he had warned that leaving the bloc would require an emergency budget involving spending cuts and tax increases. But on Monday, he said that any such moves would have to wait until Britain had a new leader; Prime Minister David Cameron has said he will step down by October. |
| Mr. Osborne added that he had spoken to his European and Group of 7 counterparts, as well as to other senior officials, such as Mr. Carney, the governor of the Bank of England; the head of the International Monetary Fund; and the chief executives of major British companies. “We have further well-thought-through contingency plans if they are needed,” Mr. Osborne added. | Mr. Osborne added that he had spoken to his European and Group of 7 counterparts, as well as to other senior officials, such as Mr. Carney, the governor of the Bank of England; the head of the International Monetary Fund; and the chief executives of major British companies. “We have further well-thought-through contingency plans if they are needed,” Mr. Osborne added. |
| Before trading opened in Japan, Mr. Abe held an emergency meeting with officials from the central bank and from the Finance Ministry to discuss how to contain the fallout from the vote in Britain, which pummeled markets in Japan and elsewhere on Friday. Japan was hit especially hard, with the Nikkei suffering its biggest one-day point drop in 16 years and the yen jumping about 5 percent against the dollar. | Before trading opened in Japan, Mr. Abe held an emergency meeting with officials from the central bank and from the Finance Ministry to discuss how to contain the fallout from the vote in Britain, which pummeled markets in Japan and elsewhere on Friday. Japan was hit especially hard, with the Nikkei suffering its biggest one-day point drop in 16 years and the yen jumping about 5 percent against the dollar. |
| On Monday, the Japanese authorities issued their strongest warning yet that they were prepared to intervene in the market to curb the rise of the yen. Markets elsewhere in the region were mostly little changed. Japan, however, generally fears an excessively strong currency, which can hurt the country’s economy by making its exports more expensive and consequently less competitive. | On Monday, the Japanese authorities issued their strongest warning yet that they were prepared to intervene in the market to curb the rise of the yen. Markets elsewhere in the region were mostly little changed. Japan, however, generally fears an excessively strong currency, which can hurt the country’s economy by making its exports more expensive and consequently less competitive. |
| “There is still uncertainty and risk in the financial markets, and it’s important that we continue to work for stability,” Mr. Abe told reporters after a meeting at the prime minister’s office. He added that he had instructed the finance minister, Taro Aso, to “coordinate with the Bank of Japan and be even more mindful of movements in the markets, including the currency market.” | “There is still uncertainty and risk in the financial markets, and it’s important that we continue to work for stability,” Mr. Abe told reporters after a meeting at the prime minister’s office. He added that he had instructed the finance minister, Taro Aso, to “coordinate with the Bank of Japan and be even more mindful of movements in the markets, including the currency market.” |
| After Mr. Abe spoke, the yen ticked down against the dollar and other currencies. That, in turn, helped push the Nikkei 225 index up 201 points when the Tokyo Stock Exchange opened. | After Mr. Abe spoke, the yen ticked down against the dollar and other currencies. That, in turn, helped push the Nikkei 225 index up 201 points when the Tokyo Stock Exchange opened. |