JAPAN DATA: Japan’s economy is estimated to be slightly more responsive
to a credit easing by the Bank of Japan than previously believed, data
released by the Cabinet Office showed. According to the ministry’s
short-term economic model which was released Thursday, a 100 basis
point cut in short-term interest rates by the BOJ would boost real GDP
by 0.48% in the following 12 months. According to the previous economic
model released in November 2008, a fall in short-term rates by the same
extent would have raised real GDP by 0.40%. Meanwhile, a business tax
cut equivalent to 1% of nominal GDP will raise real GDP by 0.39% in a
year’s time, a less stimulative impact than estimated in the previous
model (+0.48%). The Kan administration plans to lower the corporate tax
rate by five percentage points from around 40% in the next fiscal year.