Peter Thal Larsen
Peter is Asia Editor of Reuters Breakingviews, based in Hong Kong. He oversees coverage of financial services and regulation. Prior to joining Reuters, Peter spent 10 years at the Financial Times. From 2004 to 2009 he was the FT’s banking editor, leading the paper’s award-winning coverage of global banking during the credit crunch. Between 2000 and 2004 Peter reported for the FT from New York. He played a leading role in the paper’s coverage of the 9/11 attacks and their aftermath. A Dutch national, Peter has degrees from Bristol University and the London School of Economics. Follow Peter on Twitter @Peter_TL
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The central bank has responded to turmoil in global financial markets by cutting interest rates below zero. The shock move weakens the yen and opens a new front in Japan’s battle against deflation. But it also risks adding to the international tumult that prompted the BOJ to act.
The world’s second-largest economy grew 6.9 pct last year, in line with government targets. The official picture of a gradual slowdown is at odds with market jitters. Yet the numbers do little to ease investors’ key concerns: yuan devaluation and the risk of a messy debt crisis.
The central bank has sucked renminbi out of Hong Kong, sending overnight interest rates soaring. The show of force helps stabilise the short-term exchange rate. But it delays the gradual shift to a less controlled currency, and will force officials to tighten capital controls.
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