Asian Central Banks Make Moves as Europe Weighs
Japan’s central bank cut the nation's economic forecast Tuesday, claiming European markets could still be in danger.
Following last March’s massive earthquake and the ensuing tsunami, officials urged a need for strong demand to help rebuild infrastructure. With the crisis in Europe only worsening, however, demand for Japanese exports has not seen the strength originally hoped for.
The Bank of Japan cut its economic growth forecast for the fiscal year ending in March from a 0.3 percent gain to a 0.4 percent loss. The bank also lowered its forecast for the next fiscal year from a gain of 2.2 percent gain to 2 percent.
The Bank kept its key policy rate at zero to 0.1 percent.
Elsewhere in Asia overnight, India announced it would be lowering its cash reserve requirements for banks from 6 to 5.5 percent. The Reserve Bank of India released 320 billion rupees ($6.4 billion) of liquidity into the system. This comes after Indian banks borrowed 1.42 trillion rupees from the Reserve Bank of India on Monday.
With core inflation remaining an extreme concern for India, the Reserve Bank reaffirmed its repo rate of 8.5 percent for the second time.
Most Asian markets closed higher on the day.
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Following last March’s massive earthquake and the ensuing tsunami, officials urged a need for strong demand to help rebuild infrastructure. With the crisis in Europe only worsening, however, demand for Japanese exports has not seen the strength originally hoped for.
The Bank of Japan cut its economic growth forecast for the fiscal year ending in March from a 0.3 percent gain to a 0.4 percent loss. The bank also lowered its forecast for the next fiscal year from a gain of 2.2 percent gain to 2 percent.
The Bank kept its key policy rate at zero to 0.1 percent.
Elsewhere in Asia overnight, India announced it would be lowering its cash reserve requirements for banks from 6 to 5.5 percent. The Reserve Bank of India released 320 billion rupees ($6.4 billion) of liquidity into the system. This comes after Indian banks borrowed 1.42 trillion rupees from the Reserve Bank of India on Monday.
With core inflation remaining an extreme concern for India, the Reserve Bank reaffirmed its repo rate of 8.5 percent for the second time.
Most Asian markets closed higher on the day.
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