Agence France-Presse (AFP) says fears about the economic fallout from the new coronavirus weighed on Asian markets Monday as the death toll in China from the epidemic rose and infections topped 70,500.

After Wall Street’s muddled performance on Friday and US markets closed Monday for a holiday, traders reportedly turned their attention to grim economic news in the region.

Japan’s economy suffered its worst quarterly contraction in more than five years, while Singapore cut its growth forecast for this year as the virus batters the city-state’s tourism and trade, according to AFP.

That reportedly comes after Europe’s largest economy Germany reported Friday zero growth in the last quarter of 2019 and warnings from the International Monetary Fund that the virus could damage global economic activity this year.

While investors are comforted by a slowdown in new infections outside hardest-hit Hubei province in recent days, they might be less sanguine if China’s economy takes a worse-than-expected hit, said Stephen Innes of AxiCorp.

“Financial markets are not known for their rational thinking lately and given the 500 million or so mainlanders affected by the (COVID-19) quarantine… it’s also not hard to come up with more downside risks than upside ones right now.”

A spokesman for China’s national health authority said the slowdown was a sign the outbreak was being controlled.

However, World Health Organization chief Tedros Adhanom Ghebreyesus has warned it is “impossible to predict which direction this epidemic will take”.

Tokyo’s benchmark Nikkei 225 index closed down 0.7 percent after the economy shrank 1.6 percent in the three months to December from the previous quarter, even before the novel coronavirus outbreak in China hit Japan, official data showed.

“Concern over the virus is only intensifying and the mood of self-restraint is going to spread more broadly. I’m becoming downbeat on Japan’s economy,” Takashi Shiono, an economist at Credit Suisse Group, told Bloomberg News.

Mainland China’s benchmark Shanghai Composite Index reportedly closed up 2.3 percent after the central bank announced measures aimed at cushioning the economy against the health crisis.

Elsewhere, Sydney fell 0.7 percent, Taipei shed 0.4 percent and Seoul was 0.1 percent lower.

There is still skepticism among the global public, with suggestions that Beijing may be hiding the true extent of the virus the way it did during the 2002-2003 SARS epidemic.

But investors have been betting that central bank action – particularly in China – will counter the economic impact of the virus and have positive knock-on effects for emerging markets.

On Monday, the People’s Bank of China offered 200 billion yuan ($29 billion) of one-year medium-term loans at a 3.15 percent interest rate, 10 basis points lower than previously.

It also added 100 billion yuan to money markets through reverse repurchase agreements.

Wanlong Securities reportedly said in a commentary that the central bank’s steps amounted to an “interest rate cut in disguise”.

“The market got a boost from these supportive measures,” it said.

China is the world’s biggest importer and consumer of oil, and crude prices have been particularly sensitive to the epidemic.

Global oil demand will suffer its first quarterly drop in a decade as the virus lashes China’s economy and its impact ripples throughout the world, the International Energy Agency warned last week.

Financial Times says that in the Asia-pacific region, Australia and Thailand were worst hit on concern over Chinese demand for minerals and tourism.

Currencies across the Asia-Pacific region swept higher at the end of last year, boosted by the thaw in trade tensions between the US and China. Then the coronavirus outbreak hit, obliterating the gains.

After an almost 4 per cent rally in December, the Australian dollar stumbled in early February to its weakest point in almost a decade.  The currencies of Thailand and Singapore have reportedly also swooned after the central banks there flagged risks to their economies from disrupted supply chains and weakened Chinese tourism.