Japan’s central bank cut its key interest rate to 0.1 percent yesterday, joining the US Federal Reserve in lowering borrowing rates to nearly zero percent amid a worsening outlook for the global economy.
The move was widely expected and comes after the government earlier in the day said it expected Japan’s economy, the world’s second largest, to shrink 0.8 percent for the fiscal year through March.
The Bank of Japan’s policy board voted 7 to 1 to cut the uncollateralized overnight call rate target from 0.3 percent. It was the second cut in less than two months.
The central bank also introduced new steps to pump more money into the banking system to thaw a growing credit crunch. It plans to start buying commercial paper — the short-term debt firms use to pay everyday expenses — in an effort to funnel cash directly to companies and will increase its purchases of government bonds.
In its most bearish assessment of the economy this year, Bank of Japan cited the harsh impact of tumbling exports, weakening domestic demand and job losses.
“Under these circumstances, economic conditions have been deteriorating and are likely to increase in severity for the immediate future,” it said in its statement.
Japanese shares fell yesterday as investors dumped exporters on a strong yen, while the market shrugged off the Bank of Japan’s expected rate cut, which followed the US Federal Reserve’s move earlier this week to reduce its benchmark rate to a range of zero percent to 0.25 percent — the lowest level on record.
The benchmark Nikkei 225 stock average declined 78.71 points, or 0.9 percent, to 8,588.52. The broader TOPIX index lost 0.5 percent to 834.43.
“A strong yen continued to weigh down on the market, dragging down exporters,” said Yutaka Miura, a senior strategist at Shinko Securities Co Ltd.
The yen traded at 89.03 to the US dollar in Tokyo yesterday, compared with 89.48 in New York late on Thursday. Earlier in the week the yen hit 87.11 to the greenback, the weakest level for the US dollar since July 1995.
The Japanese currency’s surge has triggered strong language on the political front, with government officials dropping hints at possible intervention to limit the yen’s climb and protect Japanese exporters.
Major manufacturers like Toyota Motor Corp and Sony Corp, which are also facing slowing demand overseas, have been cutting employees and slashing production. The Nikkei Shimbun reported that Toyota’s mainstay vehicle operations are likely to post their first loss for the fiscal year through March.
‘NO SECURITY RISK’: The Railway Bureau reassured the public that the technicians’ activities were limited to technical guidance and did not involve sensitive systems The Railway Bureau yesterday said it had invited eight Chinese technicians to assist with an airport MRT construction project. The bureau issued the confirmation after an Internet user said Chinese nationals had entered the construction zone of Taiwan Taoyuan International Airport’s Terminal 3 project. They asked why “individuals from an enemy state” were allowed access to such a major national infrastructure project, which raised serious concerns over Taiwan’s industrial safety, sensitive systems and information security. The bureau’s Northern Region Engineering Branch Office said subcontractor Taiwan Handle Industrial Co (台灣手把工業) of the Taoyuan airport MRT’s “Contract No. CU05 Project A14 Station Civil, MEP &
The National Chungshan Institute of Science and Technology yesterday showcased its locally developed variants of the Vision 60 robotic patrol dog, which it plans to deploy on the nation’s outlying territories in the South China Sea. The variants were produced under the Joint Lab project — created by the institute and domestic companies — and assembled with domestically produced motors, lenses and artificial intelligence (AI) systems alongside licensed tech from the US, Missile and Rocket Systems Research Division deputy director Jen Kuo-kang (任國光) told the media event at a military base in Taipei’s Dazhi (大直) area. Taiwan has built up its strengths
TIT-FOR-TAT: The US allegedly revoked the visa of a Chinese national working at Xinhua News Agency in the US in response to Beijing’s expulsion of Vivian Wang The Presidential Office yesterday condemned China for expelling a New York Times correspondent from Beijing following the newspaper’s interview with President William Lai (賴清德), saying the move highlighted Beijing’s suppression of press freedom and its threat to international news media. Taiwan has noted a series of recent incidents in which Beijing used similar tactics to “threaten and pressure international media outlets and journalists,” Presidential Office spokeswoman Karen Kuo (郭雅慧) said in a statement. “This concerns not only press freedom and freedom of expression, but also the safety of journalists, and Taiwan and relevant partners are paying close attention to the situation,” she
NOT IMMEDIATE: Taiwan has a chance to appeal the proposed 10 percent tariff before it starts, while other countries face a 12.5 percent tariff from the trade office Taiwan is among 60 economies determined by the US to have failed to impose or enforce a ban on the importation of goods produced with forced labor, according to a notice released on Tuesday by the Office of the US Trade Representative (USTR), which proposed imposing an additional 10 percent or more tariff on them. The USTR in a statement said that following an investigation, it had determined under Section 301 of the Trade Act of 1974 that the failure of the 60 economies to impose and effectively enforce a prohibition on the importation of goods produced with forced labor is
RSS