Japan will need to take more action to protect its economy from the effect of the global financial crisis, Taro Aso, prime minister, said on Wednesday, after stocks in Tokyo plummeted to depths he described as “frankly beyond our imagination”.

The benchmark Nikkei average fell 9.4 per cent, the biggest one-day fall since the 1987 stock market crash. There were steep declines elsewhere in Asia, including an 8.3 per cent fall in Bangkok and 8.2 per cent in Hong Kong, while Indonesia halted trading after the Jakarta Composite Index dropped by more than 10 per cent for the second time this week.