(1888PressRelease)
November 07, 2008 - London - The news of the rate cut comes a day after Japanese Prime Minister Taro Aso announced Japan’s second stimulus package of 27 trillion yen ($275 billion) aimed to boost the flagging economy. Japan has the lowest interest rates in the developed world.
"Increased sluggishness in Japan's economic activity will likely remain over the next several quarters with exports leveling off and the effects of earlier increases in energy and materials prices persisting," Bank of Japan said in a statement. It added that the decision to cut rate was taken as the impact of the financial crisis had “further increased in severity”.
A strong yen, and diminishing demand from the US and Europe has severely impacted Japan’s exports. To bolster the slowing economy the Japanese government unveiled a second stimulus package on Thursday that includes increased tax exemption on housing loans and a range of tax cuts for the struggling households. Funds for care of children and elderly and support for unemployed youth are also a part of the program.
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