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| Bank of Japan makes rare rate cut | Bank of Japan makes rare rate cut |
| (20 minutes later) | |
| The Bank of Japan has cut its main interest rate from 0.5% to 0.3% - its first reduction for seven years. | The Bank of Japan has cut its main interest rate from 0.5% to 0.3% - its first reduction for seven years. |
| The move followed a global wave of rate cuts to contain the financial crisis. Japan has the lowest interest rates in the developed world. | The move followed a global wave of rate cuts to contain the financial crisis. Japan has the lowest interest rates in the developed world. |
| Tokyo's benchmark Nikkei index briefly inched up on the news, but soon fell back to around 2% down. | Tokyo's benchmark Nikkei index briefly inched up on the news, but soon fell back to around 2% down. |
| Japan on Thursday announced a five trillion yen ($51bn; £31bn) economic package to boost its flagging economy. | Japan on Thursday announced a five trillion yen ($51bn; £31bn) economic package to boost its flagging economy. |
| A soaring currency and the slowdown in Europe and the US have put Japanese exporters under severe strain in recent weeks. | |
| In a vote on whether to lower interest rates, the Japanese central bank's monetary policy board was evenly split, so the final decision was taken by governor Masaaki Shirakawa. | |
| Tax cuts and benefits | |
| Thursday's economic stimulus package, which was unveiled by Prime Minister Taro Aso, was the country's second in as many months. | |
| It came after an 11.7 trillion yen package unveiled in August by Mr Aso's predecessor, Yasuo Fukuda. | |
| As well as cutting highway tolls and increasing loan guarantees that have been offered to small companies, there will be tax cuts and other benefits for Japan's struggling households. | |
| The new package includes an expansion of tax-exempt housing loans to boost the struggling property market, funding for care of children and the elderly, and support for unemployed young people. |