Related Stories Fed cuts US rates half a point, ready for more The Fed reduced rates by half a point Tuesday in its third cut this year aimed at keeping the economy from sinking into recession. Stock investors had been clamoring for a larger 0.75 point rate cut as they watched share prices sink. But the story was very different in Japan where the Nikkei 225 Share Average surged 7.49 percent to close at 13,103.94 points. The Tokyo markets were closed Tuesday, delaying investor reaction to news the central bank would return to its zero interest rate policy in a bid to keep the country's fragile recovery hopes alight. The Japanese reaction stood in stark contrast to the disappointment of investors towards the 50 basis point cut in the United States.
Eyes now turn to Europe to see if investors there take their cue from Tokyo or the United States.
Yen carried along The dollar had earlier gained against the yen on the back of the BOJ's moves but the Nikkei rally eventually carried the currency with it. The US currency rose more than one yen to 123.44 at one point, before falling back to 122.91. The euro also slid to 111.81 from 111.88 earlier. The euro was trading at 90.92 US cents, well up Tuesday's lows around 89.85 cents, on the US woes. Treasuries winners Other beneficiaries of the US stock market fall were investors in US Treasuries, which are seen as a safe haven in times of financial turmoil.