Japan's finance minister says closely watching market volatility

Japan's finance minister Taro Aso said he was closely monitoring market volatility, as Asian shares sank on fears the coronavirus outbreak could wreak greater economic damage than first thought.

Aso, however, declined to comment when asked about the yen's recent declines against the dollar.

"We're closely watching market moves," Aso told a news conference after a regular cabinet meeting on Tuesday.

Economy minister Yasutoshi Nishimura said the government was ready to act flexibly if the fallout from the outbreak on Japan's economy warrants support for industries such as tourism.

"Concerns (over the virus epidemic) are heightening and the outlook is uncertain," Nishimura told a separate news conference.

"We're closely watching how much impact there could be and stand ready to take necessary steps flexibly depending on the urgency of the matter," he said.

At their weekend meeting in Riyadh, finance chiefs of the world's top 20 economies vowed to monitor the impact of the coronavirus outbreak on global growth and act if needed.

That did little to prevent losses in Asian shares on Tuesday, with markets anxious the coronavirus was rapidly mutating into a pandemic which could cripple global supply chains and dent global growth.

Japanese share and the yen have been particularly hit hard, as supply chain disruptions and shrinking tourism from the epidemic heightened market expectations the country's economy could tip into recession.

The dollar stood around 110.90 yen on Tuesday.