Fears of Japan recession grow

The Bank of Japan has cut interest rates, as concern increases that the country could be heading back into recession.

The Bank said the cut -- from a quarter of one per cent to point one-five of a per cent -- was in response to slowing economic growth, a declining stock market and fears of deflation.

The move follows the release of figures showing that industrial production in Japan fell by nearly four-per-cent in January, partly due to a slump in exports blamed on the slowdown in the United States. A BBC correspondent in Tokyo says that with interest rates already close to zero, the government has very little room for manoeuvre.

From the newsroom of the BBC World Service