Shares in Asia and Europe fell today, heading for their worst month ever, while the low-yielding yen shot up as Japan's interest rate cut failed to quell concerns about the deteriorating global economic outlook. The Bank of Japan joined a global easing cycle by trimming interest rates by 20 basis points to 0.3 percent, but disappointed many who had expected a bigger quarter point cut.
The move followed the Federal Reserve's decision to cut interest rates to 1 percent this week -- its lowest level since June 2004 -- to stave off a prolonged recession. The euro zone, Australia and Britain are expected to follow suit next week. However, investors feared a round of rate cuts was not enough to stem the flow of worsening corporate earnings and bolster consumer consumption in major economies which might be already in recession. In response, oil and commodities fell sharply.