Bank of Japan holds rates steady

Central bank leaves benchmark rate unchanged amid concern that credit crunch could slow U.S. economy, derail recovery in Japan.

( AP ) -- The Bank of Japan kept its benchmark interest rate steady Wednesday as investors in Tokyo sent Japanese stocks soaring in reaction to a bigger-than-expected cut in U.S. rates overnight.

Later in the day the bank also kept its assessment of the economy unchanged, saying moderate growth was holding up.

The Japanese central bank's policy committee voted 8-1 to keep the overnight call rate at 0.5 percent, a bank official said at the end of the two-day meeting.

Hirokata Kusaba, senior economist with Mizuho Research Institute in Tokyo, noted that the Bank of Japan wasn't likely to raise interest rates right after the Federal Reserve's rate cut. But he said that once global markets stabilize, the Bank of Japan is likely to resume raising rates, perhaps later this year.

"The major concern for the Japanese economy is that a slowdown in the U.S. economy may bring down external demand," he said. "But slipping exports to the U.S. are being offset by growing exports to emerging markets and to Europe."

Aiming to keeping the recent credit crunch from hurting the overall U.S. economy, the Fed on Tuesday reduced its fed funds rate by a half percentage point to 4.75 percent. Many analysts had expected a quarter-point cut.

Government officials and investors in Japan welcomed the Fed's move amid worries that problems in the U.S. mortgage market would trigger a slowdown in the U.S. economy, Japan's biggest export market.

"They have reacted very quickly to the realities," said Kaoru Yosano, Japan's chief government spokesman, of the Fed.

Before problems in the U.S. mortgage market sparked the recent global market turmoil, investors had anticipated the Japanese central bank would raise rates at its September meeting. But those expectations had dramatically dwindled amid the market volatility and concerns about the U.S. economy.

The world's central banks like to show they are working together to maintain global stability, and the Bank of Japan would find it hard to raise rates at a time the U.S. is cutting them.

Also, there are persistent signs of deflation in Japan, where the core consumer price index fell 0.1 percent in July, the sixth straight monthly drop. And last week the government said the economy contracted in the April-June quarter at an annual rate of 1.2 percent, reversing its initial estimate for a 0.5 percent growth.

Asian markets rallied on news of the Fed's aggressive rate cut.

Tokyo's benchmark Nikkei 225 stock index soared 579.74 points, or 3.67 percent, to 16,381.54 points. That was it's biggest point increase since March 4, 2002. Share prices also surged in Hong Kong, South Korea, Australia, Singapore and Taiwan.

Meanwhile, the Bank of Japan, in a monthly report released Wednesday, left its assessment for the world's second-largest economy the same as in the previous month. The bank repeated its optimistic outlook for the future, while expressing some caution about the U.S. economy.

" Japan's economy is expected to expand moderately," it said.

The BOJ last raised interest rates in February.

Experts make forecasts for Georgia's post-COVID tourism industry recovery
Experts make forecasts for Georgia's post-COVID tourism industry recovery
Uzbekistan, Qatar consider development of interaction in tourism sector
Uzbekistan, Qatar consider development of interaction in tourism sector
Uzbekistan, Belarus to facilitate organization of direct tourist exchange
Uzbekistan, Belarus to facilitate organization of direct tourist exchange
Loading Bars
Latest
Weekly review of Azerbaijani ICT sector highlights
UK's Sunak will set out plans to raise income tax by 6 billion sterling
Australia receives AstraZeneca vials as it ramps up vaccination drive
January 2021 value of mortgage loans in Azerbaijan grows in absolute terms
Kazakhstan adds 791 new COVID-19 cases
5.5-magnitude quake hits 81 km SW of Islay (Matarani), Peru
Iranian Minister unveils ports' infrastructure dev't plans
Turkey confirms 9,193 new COVID-19 cases, 2,693,164 in total
S&P Global affirms Georgia’s sovereign credit rating at ‘BB’
Razi COVID-19 vaccine to begin clinical trial: Minister
5 died after accident in northeast China chemical fiber plant
US regulator approves Johnson&Johnson coronavirus vaccine
Kazakhstan twofold decreases exports to Norway amid COVID-19
Iraq reports 3,543 new COVID-19 cases, 692,241 in total
5.3-magnitude quake hits 3 km SW of Point MacKenzie, Alaska
Qatar reports 460 new COVID-19 cases, 163,197 in total
Weekly review of highlights in Azerbaijani financial market
UK records another 7,434 coronavirus cases, 290 deaths
It is necessary to end deployment of Armenian armed forces on territory of Azerbaijan - Foreign Ministry
WHO reports over 420,000 new daily cases of COVID-19
Istanbul’s major Galataport project to go live in April
0.03% of pupils and 0.1% of school staff in Georgia confirmed with Covid-19 this week
Iran's Energy Exchange announces products to be on sale on February 28
Uzbekistan's largest share in formation of GDP falls on Tashkent
Azerbaijan's revenues from tea, coffee exports double in Jan.2021
Cargo movements in Iran's Khalij-e-Fars port increase
China conditionally approves one-shot recombinant COVID-19 vaccine
Stock gains power Buffett's Berkshire Hathaway to higher profit
More than 165,000 apply for Turkey’s most popular scholarship
Georgian Railway resumes passenger transfers
Kazakhstan reports value increase in all types of deposits
New road put into operation in Iran's Golestan Province
Azerbaijan sets up working subgroups to prepare 2021-2025 Development Strategy
Bahar Azadi gold coin price falling in Iran
Azerbaijan reports 172 more COVID-19 recoveries
Azerbaijan's Ministry of Finance to put up medium-term bonds for auction
Azerbaijan's banking sector ends January 2021 with profit
Foundation of several manufacturing enterprises laid in Iran's Qazvin Province
Uzbek-Korean JV to buy spare parts for metal detector via tender
USAID to promote start-up dev’t in Turkmenistan
President Aliyev: Any attempt to violate implementation of November 10th declaration will be very harmful for Armenia (VIDEO)
Iran reveals COVID-19 data for February 27
Bosnian TV channel visits liberated Azerbaijani Aghdam, reminds of Khojaly genocide
Azerbaijani police officers find ordnances left by Armenians in Khojavand (PHOTO)
Long-term energy demand impact of COVID-19 is modest
President Aliyev to Iranian reporter: Your question is a kind of an accusation (VIDEO)
New Zealand's largest city Auckland back to lockdown after COVID-19 case
Iran pins hopes on Swiss financial channel to purchase COVID-19 vaccines
Foreign journalists visit village where two-year-old Azerbaijani girl was killed by Armenians
Volume of cargo loaded, unloaded in Iran’s Chabahar port revealed
Weekly review of Azerbaijan's oil and gas sector
Eni Turkmenistan Ltd opens tender for catering, housekeeping services
Kazakhstan boosts imports of Switzerland-made products
Uzbek ministry, German Society for International Cooperation sign agreement
Uzbekistan, China expand mutual trade despite COVID-19
Georgia reports 373 new cases of coronavirus on Feb.27
Buy/sell operations at Iran Mercantile Exchange soar
Weekly review of Azerbaijani precious metals market
Baku Metro continues preparatory work for commissioning of new 'November' 8 station
Iran's exports to Russia increase
Uzbek-Korean JV to buy spare parts for pumps via tender
Kazakh airlines eye to launch several flights on Turkestan-Istanbul route
UNDP in Turkmenistan opens tender for services on seismic work
Volume of electricity generated by renewable energy power plants in Iran announced
Researcher talks monuments on ancient Azerbaijani lands vandalized by Armenians (PHOTO)
Uzbekistan reveals COVID-19 data for Feb. 27
Azerbaijan's MoD shares footage from Gubadly's Afandilar village (PHOTO/VIDEO)
Iranian currency rates for February 27
Remittances from Azerbaijan to Georgia show highest growth rate
Belarus considering possibility of supplying agricultural machinery to Turkmenistan
Turkmenistan’s Turkmenbashi Oil Refinery exceeds plan for kerosene production
Azerbaijani oil prices published
Kazakhstan's uranium mining company opens tender to acquire electro-technical materials
Issuance of construction permissions in Georgia down
Philippines extends partial coronavirus curbs in capital until end-March
Weekly review of Azerbaijani currency market
Kazakh gas supply company to attract equipment installation services via tender
Turkey's tourism industry puts hopes on safety measures for new season
Azerbaijani marketing platform plans to become regional player
Argentine health minister tests positive for COVID-19
Czech gov't declares new state of emergency over coronavirus
U.S. FDA advisors recommend approving Johnson & Johnson COVID-19 vaccine for emergency use
Increase in malware attacks makes cybersecurity more relevant than ever - Kaspersky Lab in Azerbaijan
South Korea vaccinates 18,000 to start ambitious COVID-19 campaign
US may announce new sanctions on Russia within weeks - White House press secretary
Founder of Indian Jet Airways eyes opening airline in Uzbekistan’s Namangan region
Saudi Arabia rejects U.S. intelligence report on Khashoggi's killing: statement
Israel registers 2,738 new COVID-19 cases, 769,971 in total
U.S. announces 'Khashoggi ban' for 76 Saudi individuals
Number of COVID-2019 cases across globe up by over 427,000 in past day
Slovenia confirms first case of coronavirus variant identified in S. Africa
UN Security Council adopts resolution on vaccination
UK records another 8,523 coronavirus cases, 345 deaths
Kazakhstan shows interest in supplies of Belarusian sugar, its manufacturing technology
Turkey reports 9,205 new COVID-19 cases, 2,683,971 in total
Iran, Russia emphasize need to coop. in agricultural sector
When will Georgia receive its first doses of the COVID-19 vaccine?
House poised to approve Biden's $1.9T coronavirus relief bill in Friday vote
Canada approves use of AstraZeneca COVID-19 vaccine
Azerbaijan discloses volume of liabilities of banks in Jan. 2021 accounting for deposits
All news