The yen rose to a three-year high against the euro and gained versus
the dollar on concern interest-rate cuts by global central banks may
fail to boost confidence, encouraging the sale of higher-yielding
assets.
The Federal Reserve reduced its target lending rate by a
half-percentage point to 1.5 percent, while the European Central Bank
and the central banks of the U.K., Canada, Sweden and Switzerland also
reduced rates. Separately, China's central bank lowered its key
one-year lending rate.
The Bank of Japan held its target lending rate at 0.5 percent
yesterday, compared with 7.5 percent in New Zealand and 5.75 percent in
Norway. The Reserve Bank of Australia cut its cash rate by 1 percentage
point to 6 percent yesterday.
The Fed also reduced its rate on direct loans to banks, the discount
rate, by a half-point to 1.75 percent. The U.S. central bank said
yesterday it would set up a special vehicle to buy commercial paper to
help revive the corporate-debt market.
Finance ministers and central bankers from the Group of Seven nations
will meet in Washington on Oct. 10 to discuss the financial crisis.
Measures to stabilize global stock markets will be on the agenda,
according to a Japanese official who briefed reporters on condition of
anonymity before the central banks' announcement. The G-7 comprises
Canada, France, Germany, Italy, Japan, the U.K. and the U.S.
EUR/USD after the second unsuccessful testing a mark $1.3750 has receded in area $1,3620.