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| Bank of Japan, Tokyo. |
The Bank of Japan today cut its benchmark interest rate to 0.3 percent to help counter a severe recession.
Governor Masaaki Shirakawa cast the deciding vote to lower the overnight lending rate from 0.5 percent after four of the eight board members dissented, the central bank said in Tokyo today.
Three wanted to cut the rate to 0.25 percent, and one wanted to leave it unchanged, Shirakawa said.
Earlier this week, the Nikkei 225 Stock Average slumped to the lowest level since 1982 and on Thursday, Japanese Prime Minister Taro Aso announced in Tokyo Thursday evening, a ¥27 trillion - $275 billion - stimulus package and credits to support the country's faltering economy.
The Bank said in a statement that environment surrounding Japan's economic activity and prices from fiscal 2008 to 2010 is attended by a significant level of uncertainty, arising from the range of possible developments in the global financial situation and how these affect the real economy, as well as developments in commodity prices. When making future projections of economic activity and prices under these circumstances, careful assessment of risk factors becomes even more important than usual given that the probability of the baseline scenario being realized is not as high as in the past.
The Bank said due consideration has been paid to these issues in forming the outlook for economic activity and prices as detailed here.
