December 19, 2008

Japan interest rate cut to 0.1 percent

Japan's central bank cut the key interest rate to 0.1 percent from 0.3 percent Friday to bolster the economy and arrest the yen's appreciation.

The Bank of Japan's second interest rate cut in three months came on the same day that the government forecast zero GDP growth for fiscal 2009 starting in April.

Japan's export-driven economy, which is already in recession because of the global financial turmoil, has seen the yen appreciate sharply in recent weeks against the U.S. dollar, which makes its exports, such as automobiles, more expensive.

Earlier this week, the U.S. Federal Reserve cut its key lending rate to a level between zero and 0.25 percent.

The central bank said Japan's economic conditions have been deteriorating, Kyodo news service reported.