With bankruptcies soaring and Bank of Japan Governor Yasushi Mieno coming under fire from Liberal Democratic Party aides, the central bank may be ready to slash its discount rate as much as three-quarters of a percentage point, to 2.5%. Such a move would be the sixth cut since 1991. Other interest rates are already falling. The Finance Ministry has forced long-term bond rates down more than one-tenth of a point since January after signaling it would buy $800 million a month in government debt. And several banks are cutting the long-term prime rate to 5.2%. That will push mortgage rates down as much as a half-point.

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