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Japan Pumps Cash Into Market

Interest rate hikes unlikely

By Peter Fearon,  Newser Staff

Posted Aug 13, 2007 12:16 AM CDT
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(Newser) – The Bank of Japan pumped $5.1 billion into the Japanese financial system today as the  global credit crunch continued to ripple through the Asian markets, Bloomberg reports. Adding to the jitters, Japan's growth is slowing more markedly than economists predicted; the world's second-largest economy expanded by only 0.5% in the last quarter, compared to 3.2% the previous quarter.

The central bank meets in two weeks to decide whether to raise the key overnight lending rate from 0.5 percent, the lowest among major economies, which is unlikely now given economic indicators. Government officials expressed optimism that Japan would pull out of its current deflation, but consumers—whose spending accounts for more than half of the economy—are losing the incentive to buy.

Bank of Japan Gov. Toshihiko Fukui (AP Photo/David Guttenfelder, File)
Bank of Japan Gov. Toshihiko Fukui (AP Photo/David Guttenfelder, File)   (Associated Press)
A woman walks past a stock indicator in Tokyo Friday, Aug. 10, 2007. Japanese stocks plunged Friday, following a sharp fall on Wall Street overnight, sparked by fears about a spreading credit crunch. The Nikkei Stock Average of 225 issues shed 2.37 percent, or 406.51 points, to close...
A woman walks past a stock indicator in Tokyo Friday, Aug. 10, 2007. Japanese stocks plunged Friday, following a sharp fall on Wall Street overnight, sparked by fears about a spreading credit crunch....   (Associated Press)
Bank of Japan Gov. Toshihiko Fukui (AP Photo/Itsuo Inouye)
Bank of Japan Gov. Toshihiko Fukui (AP Photo/Itsuo Inouye)   (Associated Press)
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Turmoil in Asia

Market jitters presents an opportunity for investors
Wall Street Journal

 
stock market • Japan • Bank of America • subprime mortgages • finance • GDP • Nikkei • Asian markets • Bank of Japan • global credit • Japanese economy

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