JPY Daily News

Bank of Japan Cuts Interest Rates to 0.3%

The JPY was hit with a large loss against the Dollar yesterday of 183 pips to close the day down at 98.44. A rise in the U.S. stock market helped moved the Yen lower. As equity markets recoup recent losses, investors move money from the safety of the JPY to riskier and higher yielding assets.

The Bank of Japan cut Interest Rates today for the first time in 7 years to 0.30 % from 0.50 %, joining global efforts to contain the financial crisis despite the estimation that this reduction will probably have a little economic effect. In addition, Japanese Prime Minister Taro announced yesterday a new economic relief package. The latest relief package will come in the way of tax cuts for consumers and businesses as well. The Japanese economy has been hit hard by the recent appreciation of the JPY, sending the nation's heavy economy export into a tailspin.

In fact, economists have their doubts as to the effectiveness of the newest relief package. Rather then spending the extra money received from the government, the Japanese consumer has the propensity to save. As a result, it may have a negative impact on the JPY and push the Yen lower against its crosses.

Current Time: 05/27 00:24 GMT

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#	Time	$€£¥	Event	Per.	Prev.	Fore.	Act.	Imp.
10/31
		JPY	BoJ Press Conference		*	*	*
		JPY	Monetary Policy Statement		*	*	*
		JPY	Overnight Call Rate		0.50%	0.25%	0.30%
	05:00	JPY	Housing Starts	y/y	53.6%	50.8%	54.2%
	06:00	JPY	BoJ Outlook Report		*	*	*