Nikkei rebounds, S Korea declines despite highest rate cut
27 Oct 2008
With the yen's decline from a 13-year high of 94 to the dollar, buying of export-linked shares helped Japan's key stock index Nikkei rebound in early trades this morning, with the benchmark Nikkei 225 rising 200.95 points to 7,850.03 shortly after opening, rebounding or 2.63 per cent from earlier losses.
Elsewhere in Asia, stocks continue to trade deep in red.
The index had opened lower even as a report circulated that the that the government was considering large capital injection into strickem Japanse banks to prevent a panic in the financial markets.
The Japanese markets are speculating that the country's central bank, Bank of Japan, may intervene in the market to pressure the yen against the dollar.
Analysts say, what the market really wants is a package of stimulus measures to boost the Japanese economy.
In contrast South Korean markets traded lower despite the announcement of the largest rate cut in the country's recent history, or 0.75 percentage point to 4.25 per cent, with the main KOSPI at 933.35, down 5.4 points, or 0.58 per cent as the markets viewed the cut as possibly having a short-term impact on boosting the economy, but insufficient to calm the widespread market fears.
