Japan hails US interest rate cut

TOKYO: Japan on Wednesday hailed the US Federal Reserve's hefty cut in interest rates, saying it was prompt action to ease distress in financial markets.   

"I think they are responding promptly to the current situation," Chief Cabinet Secretary Kaoru Yosano said.   

The Fed "made the decision by considering every single element, including the psychological impact of a slump in the housing industry and concerns about the financial market," the government's top spokesman told a news conference.   

The Federal Reserve on Tuesday cut the federal funds rate, which banks charge each other for overnight loans, by a hefty half point to 4.75 percent, the first reduction in four years.   

Share prices in the United States and Asia soared after the Fed decision, which was meant to ease a credit squeeze triggered by defaults on mortgage payments by high-risk US customers.   

The Bank of Japan's policy board kept its own super-low interest rate unchanged Wednesday at 0.5 percent amid domestic political upheaval and recent weak data.