US, Germany welcome Japanese tax cuts

The United States and Germany have welcomed Japan's attempts to stimulate its flagging economy by cutting personal income taxes by more than fifteen billion dollars.

An American Treasury Department spokesman also praised Japan's intervention in the foreign exchange markets, a move designed to boost the value of the yen.

The Bank of Japan sold more than one billion dollars in exchange for yen on Tuesday in its first intervention in the market for more than five years.

Share prices and the value of the yen rose sharply on the news, but a BBC business correspondent says many analysts believe theseshort-term measures might not be enough to bring back long-term confidence in the Japanese economy.

From the newsroom of the BBC World Service