Tokyo, March 19 (Bloomberg) -- The Bank of Japan will probably cut interest rates to near zeroafter today's policy-board meeting, in an attempt to ward off recession and reverse a decline instocks, analysts said.
Fifteen of the 16 economists, investors and traders surveyed by Bloomberg News said the centralbank will probably lower the key overnight loan rate, at which banks lend to each other, to close to zero. The bank cut the rate 10 basis points to 0.15 percent on Feb. 28.
The BOJ is trying to ward off a recession and reverse a slide in stocks that sent the main Nikkei225 index to a 16-year low last week. It may take more radical steps, such as a pledge to increasethe amount of bonds the bank buys each month, for the bank to revive the economy, someanalysts said.
``Cutting rates close to zero has already been factored in by financial markets, and the focus iswhat else the BOJ can do'' to help the economy, said Koji Shimamoto, chief strategist at BNPParibas Securities Japan.
The board meeting started just after 9 a.m., Japan time. The board's decision is announced about10 minutes after the meeting finishes, usually late in the afternoon.
There's ``no merit in delaying a rate cut,'' said Takehiro Sato, an economist at Morgan StanleyDean Witter Japan. ``By waiting, the BOJ would only increase the risks to the economy.''
Fed Rate Cuts
Bank of Japan Governor Masaru Hayami last week hinted the bank may cut rates to close to zero.``We'll seriously listen to'' calls to help the economy, Hayami told a parliamentary committee.Board members ``want to make an appropriate judgment.''
A return to the zero-rate policy, first introduced in March 1999, would come just seven months after rates were raised for the first time in 10 years. The sudden turnaround in policy highlights thefragility of Japan's economy when growth in its major trading partners, led by the U.S., slows.
The U.S. Federal Reserve will probably cut its benchmark rate by at least half a percentage pointTuesday. A majority of the 25 investment firms that trade government securities directly with theFed expect its policy makers to lower the overnight bank lending rate to 5 percent from 5.50percent. Ten of the dealers foresee a cut to 4.75 percent.
Stocks, Yen Decline
Japan's industrial production had its biggest decline in more than five years in January, and exportsto Japan's three major markets -- Asia, the U.S. and Europe -- fell, handing the country its firsttrade deficit in four years.
On top of that, the benchmark Nikkei stock index has dropped 24 percent since interest rates wereraised Aug. 11, taking its loss this fiscal year to 41 percent. The index last week sunk to a 16-year low 11,433.88.
That's fueled concern some banks will report losses, because from April 1 they have to valuestocks they hold at market price for the first time.
The Nikkei fell 0.5 percent in early trade to 12,174.60. The yen was recently at 123.35, its lowestsince May 1999, from 123.03 in New York last Friday.
Сегодня проходит заседание Банка Японии и аналитики ожидают снижения ставокпрактически до нуля. Когда в в августе ставки подымались. глава Банка Хаямиаргументировал это восстановлением экономики и окончанием дефляционныхпроцессов. Эти факторы сейчас изменились. Правительство уже заявило, чтоэкономика "остановилась в своем росте". а дефляционные процессывосстанавливаются. Потребительские цены в Токио снизились на 1,1%г/г зафевраль, что является рекордом. Возвращение к политике нулевых ставок можетсопровождаться еще более радикальными шагами, например пересмотром целевыхпоказателей. Если же BOJ не снизит ставки сегодня, то возможно это произойдетна следующем заседании 13 апреля. На финансовые рынки однако решение поснижению ставок по мнению экспертов не окажет сильного влияния. Инвесторовбольше интересует как долго BOJ посчитает необходимым держать ставки на нуле.