TOKYO, Sept. 19 (UPI) -- Japan’s central bank left its 0.5 percent interest rate unchanged Wednesday on the heels of a hefty half-percentage-point cut by the U.S. Federal Reserve.
The 8-to-1 decision on the short-term rate by the Bank of Japan's Policy Board, with former Credit Suisse economist Atsushi Mizuno being the only dissenter, was in line with market expectations, Kyodo news service reported. Mizuno had proposed a quarter-percentage-point hike.
Market players had anticipated the decision because of global volatility stemming from the U.S. subprime mortgage loan crisis. On Tuesday, the U.S. central bank cut its benchmark fed funds rate to 4.75 percent from 5.25 percent, the first such reduction in four years that set off a worldwide market rally.
Any economic slowdown in the United States could adversely impact Japan’s economy with its heavy reliance on exports.
The Bank of Japan raised its rate to 0.5 percent from 0.25 percent in February. It was the first such hike in six years.
