Currencies: Yen Slips After Bank of Japan Cuts Discount Rate

The focus remains on Japan again today -- is anyone surprised?

In a move regarded as largely symbolic, the Bank of Japan cut its official discount rate this morning by 0.15% to 0.35%. This is the first time the BOJ has lowered the discount rate in six years.

The discount rate in most countries is at the bottom of official interest rates, thereby allowing banks to reduce their own rates whenever the discount rate is lowered. But in an odd set of circumstances in Japan, the discount rate is not the lowest official rate, so banks are not able to shift their rates in any way as a result of today's move. The cut this morning is therefore regarded as largely symbolic, rather than as a maneuver to stimulate the ailing economy. ...