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US rate cut boosts Asian shares | US rate cut boosts Asian shares |
(about 2 hours later) | |
Asian shares have risen sharply, boosted by Wednesday's decision from the Federal Reserve to cut US interest rates from 1.5% to 1%. | Asian shares have risen sharply, boosted by Wednesday's decision from the Federal Reserve to cut US interest rates from 1.5% to 1%. |
Tokyo's Nikkei 225 had its third strong day in a row, rising 9.96%, although it is still down 20% since the beginning of October. | Tokyo's Nikkei 225 had its third strong day in a row, rising 9.96%, although it is still down 20% since the beginning of October. |
In Hong Kong the Hang Seng index ended the day up 12.8%. | |
Korea's benchmark index rose a record 12% on news of a currency swap arrangement with the Federal Reserve. | |
Stimulus package | Stimulus package |
Sentiment in Japan was strong ahead of an announcement after the end of trading from Prime Minister Taro Aso of a second package of measures to boost the economy. | |
The 5 trillion yen ($51bn; £31bn) of measures was expected to include tax cuts for homeowners, support for small and medium-sized businesses and a cut in highway tolls. | |
The Bank of Japan is expected to cut interest rates on Friday for the first time in seven years. | The Bank of Japan is expected to cut interest rates on Friday for the first time in seven years. |
"If I have to wrap things up in one word, it's still a rebound," said Soichiro Monji at Daiwa SB Investments. | "If I have to wrap things up in one word, it's still a rebound," said Soichiro Monji at Daiwa SB Investments. |
"The question is how far the rebound can take the market, and that'll be difficult as the economy won't improve overnight and currency markets are still unstable." | "The question is how far the rebound can take the market, and that'll be difficult as the economy won't improve overnight and currency markets are still unstable." |
Dollar funding | Dollar funding |
The Federal Reserve also boosted Asian markets with the news that it is providing $30bn of funding to South Korea, Singapore, Brazil and Mexico. | The Federal Reserve also boosted Asian markets with the news that it is providing $30bn of funding to South Korea, Singapore, Brazil and Mexico. |
"With this deal, Korea secured a 'safe dollar supplier' in the Fed and that will ease concerns over a dollar liquidity shortage," said June Park, an economist at Woori Investment & Securities. | "With this deal, Korea secured a 'safe dollar supplier' in the Fed and that will ease concerns over a dollar liquidity shortage," said June Park, an economist at Woori Investment & Securities. |
The news reversed a slump in Korean shares and also sent Singapore's markets up nearly 7% by the end of the morning. | The news reversed a slump in Korean shares and also sent Singapore's markets up nearly 7% by the end of the morning. |
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