South Korea, Hong Kong, Taiwan Cut Rates, Joining Global Action

South Korea, Taiwan and Hong Kong cut interest rates a day after reductions by the U.S., Europe and China to stem damage from the global financial crisis.

The Bank of Korea and Taiwan's central bank lowered their rates by a quarter of a percentage point and Hong Kong cut its benchmark to 2 percent. The Bank of Japan, which kept its policy rate at 0.5 percent this week, pumped 2 trillion yen ($20 billion) into the financial system.

Stocks in China, Japan, South Korea, Taiwan and Hong Kong all rose after the rate cuts, snapping market declines that have helped wipe more than $5 trillion off stocks globally this month. The International Monetary Fund yesterday forecast the world's advanced economies will expand at the weakest pace since 1982 next year, sapping growth in emerging nations.

``Investors are a bit relieved with the Asian central banks' actions, which will support flagging economies,'' said Mamoru Yamazaki, chief Japan economist at RBS Securities Japan Ltd. in Tokyo. ``The relief also comes from confirming that those banks are flexible enough for more rate cuts.''

The Federal Reserve, European Central Bank and four other central banks lowered rates by a half point yesterday in an unprecedented, emergency coordinated bid to reduce fallout from the worst financial meltdown since the Great Depression.

Within minutes of yesterday's joint action, the People's Bank of China pared its one-year lending and deposit rates by 0.27 percentage point.