Business

Australia cuts interest rates to historic low

Sydney Harbour skyline Image copyright DEA

Australia's central bank has reduced interest rates to a record low, cutting its cash rate from 1.75% to 1.5%.

The decision by the Reserve Bank of Australia was widely expected after a recent run of weak inflation numbers.

The bank's board hopes the further cut will boost the labour market and economic growth.

Australia's economy has been moving towards growth less dependent on commodities after the end of an unprecedented mining boom.

"The Board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting," said RBA governor Glenn Stevens.

Australia's benchmark ASX/200 closed 0.8% lower at 5,540.54.

Japan stimulus

Shares in Tokyo fell as investors awaited details of fresh spending from the government.

Japan's Nikkei 225 index dropped 1.5% to close at 16,391.45.

Prime Minister Shinzo Abe is due to outline details of the government's 28tn yen ($265bn; £200bn) stimulus package, announced last week.

While the amount was higher than analysts had expected, economists doubt the package will have any real impact.

Image copyright AFP
Image caption Japan remains stuck with low growth and weak consumer spending

Despite three years of Abenomics - the term used to describe Mr Abe's economic reform programme - Japan has remained in a two-decade-long slump of low growth and weak consumer spending.

In South Korea, the Kospi followed Japan's lead and also traded lower, closing down 0.5% at 2,019.03.

In China, the mainland Shanghai Composite closed 0.5% higher at 2,968.67, while Hong Kong's Hang Seng index was closed as typhoon Nida hit the city.