JAPAN: Japan welcomes U.S. rate move

The Japanese top government spokesman, Kaoru Yosano, praised the U.S. Federal Reserve Bank's move overnight to cut interest rates as a prompt and accurate move on Wednesday (September 19). The Federal Reserve on Tuesday (September 18) slashed U.S. interest rates by a hefty half-percentage point in a bold bid to shield the economy from a housing slump and financial turbulence, sparking a big rally on Wall Street. "The U.S. economy is a large economy whose health directly and indirectly enormously affects the economies of Europe, East and South Asia and Japan. The fact that they have speedily and accurately moved to bring down short term rates and interest rates is though this is about another nation's central bank and if I am pressed to reply they have speedily and properly dealt with the issue and we can appreciate this," Yosano told reporters on Wednesday at a regular press conference. It was the first cut in the federal funds rate -- the Fed's main tool to influence the economy -- since June 2003 and the first half-point cut since November 2002. Financial markets had widely expected the Fed to lower overnight borrowing costs, but were surprised by the aggressive half-point move, the first rate cut since Ben Bernanke took over as chairman of the central bank in February last year. Japan's Nikkei average surged 3.4 percent to a two-week high on Wednesday, led by high-tech firms such as TDK Corp and Kyocera Corp, with investors encouraged by the Federal Reserve's bigger-than-expected rate cut. The benchmark Nikkei ended the morning session up 531.49 points at 16,333.29. The broader TOPIX index climbed 3.52 percent to 1,564.08.

ITN Source | September 19, 2007

Tags:. .east. .central. .welcomes. .main. .conference