Bank Of Japan

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[View Slide Show: More Gloom The Bank of Japan cut interest rates to just above zero on Friday and moved to pump cash into the market to ease a credit crunch that has ravaged companies worldwide and shoved top economies, including Japan, deep into recession. Carmakers are among the hardest hit by the global economic downturn with Toyota expected to report its first ever annual parent loss and US firms scrambling to secure emergency government funding to avoid collapse. The BOJ's decision to lower its key policy rate to 0.10 per cent from 0.30 per cent follows Tuesday's dramatic rate cut by the Federal Reserve, which took US rates below Japan's and helped push the yen to a 13-year high against the dollar, putting pressure on the BOJ to take action. The yen dipped against the dollar, Japanese government bond futures erased losses and Tokyo share prices trimmed losses after the move, which together with reports on progress on the US auto industry bailout could boost investor sentiment. General Motors Corp and Chrysler LLC closed in late Thursday on a deal to secure emergency loans as part of a US government aid package that would demand sweeping restructuring at the troubled automakers, sources familiar with the talks told Reuters. Emergency federal loans for the two could be announced as early as Friday, when Chrysler is set to begin a month-long production halt, the sources said. In addition to cutting interest rates, the Bank of Japan said it would step up its outright buying of Japanese government bonds and would also temporarily buy commercial paper outright, to ease the squeeze crippling the world's second-biggest economy already mired in a recession. &quot;The BOJ appears to have gone all out this time by deciding to take a wide variety of steps,&quot; said Koji Ochiai, senior market economist with Mizuho Investors Securities. &quot;What was a little surprising, however, was that it did not lower interest rates all the way to zero like the Fed did this week. The BOJ leaves itself exposed to pressure to now cut rates to zero.&quot; (Reuters)