Japan cuts interest rates

Overnight, the Bank of Japan cut interest rates for the first time in seven years. The bank also cut back on Japan's economic outlook, saying strains in global markets are rising and that severe conditions for the world will stay for some time. Rates there are now at 0.3%, down from 0.5%. Japan already had the lowest interest rates in the developed world before the decrease, but despite this many analysts are disappointed the rate was not reduced even more - a fact borne out by the drop in the Nikkei this morning. A soaring Yen along with the slowdown in Europe and the US have put Japanese exporters under severe strain with Sony, Nissan, Toyota and Fujitsu, this week, all reporting miserable profits for the first half of 2008. The Bank of Japan's move followed a rate cut from the U.S. Federal Reserve earlier in the week and will almost certainly precede 0.5% cuts by the European Central Bank and Bank of England next week.