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Lou Jiwei

LONDON/BEIJING. – Turmoil unleashed by Britain’s vote to leave the European Union heightened anxiety in Asia yesterday, with China, Japan and South Korea fretting over the risk to global financial stability a few hours before markets reopen.

In Britain, open conflict spread from the ruling Conservatives to the opposition, and senior Labour lawmakers attempted a coup against their leader after traditional supporters rejected the party’s pro-EU stand in droves at Thursday’s referendum.

Splits widened across the nation. Over three million Britons signed a petition calling for a re-run of the referendum, with the number climbing by the hour, and an opinion poll showed a strong majority of Scots now want to break with the United Kingdom.

Chinese Finance Minister Lou Jiwei said the vote “will cast a shadow over the global economy”.

“It’s difficult to predict now,” he said at the first annual meeting of the Asian Infrastructure Investment Bank in Beijing. “The knee-jerk reaction from the market is probably a bit excessive and needs to calm down and take an objective view.”

Central banks promised through their global forum to do as much as they could to limit volatility on the markets.

“With good cooperation at the global level, I am confident that uncertainty can be contained and that adjustments will proceed as smoothly as possible,” Jaime Caruana, head of the Bank for International Settlements said.

Nevertheless, Japan fretted over the effect on the global currency market and contemplated official action.

“Speculative, violent moves have extremely negative effects,” said Tomomi Inada, policy chief of the ruling LDP party, according to Nikkei daily. “If necessary, the government should not hesitate to respond, including currency intervention.”

Prime Minister Shinzo Abe has tried to engineer a weaker yen to encourage exports to help revive the Japanese economy. But after initial success, investors have sought safety in the yen this year due to stock market turmoil and now the Brexit vote, pushing the currency back up.

South Korea’s finance minister also said he feared markets will remain volatile throughout negotiations on the British exit, while Hong Kong’s finance chief promised his government was keeping a close eye on developments after what he described as “a big surprise” from the referendum result.

Beyond Asia, the United States – which during campaigning made clear it wanted Britain to stay in the EU — also showed signs of unease. Secretary of State John Kerry will meet EU foreign policy chief Frederica Mogherini in Brussels and British Foreign Minister Philip Hammond in London today. – Reuters.