Japanese cut rates - will it achieve much?

Today, the Bank of Japan decided to cut official interest rates, jumping on the global bandwagon of looser monetary policy throughout the developed world. I wonder though whether this will have much effect?

Japanese official rates havent been over 1% since 1995 after trying to stem the deflationary spiral after the bubble economy burst in the early 1990's:

Here's a longer graph:

As you can see, with Japanese rates so close to zero, is a drop in the official rate from 0.5% to 0.3% really make going to make that much difference?

I dont think we'll see Japanese rates rise significantly anytime soon. But really this cut was a gesture to show that Japan is taking part in the global co-ordinated action against the credit crisis. Unfortunately this monetary policy action wont spare them from the deflationary effects of the Commodity price crash which should begin to feed into their inflation numbers over the coming months.

Interesting post to begin with but will history repeat once again...?

Panic lows have historically occurred on day 27/28 of the 7th lunar cycle which was Sunday and Monday (27th October). The panics of 1857/1907/1929/19 87/1997 all marked their lows on these days in October.

Today has certainly provided a relief rally - s&p500 up near 10% at one stage, jpy and usd both off against majors, gold up... but will it last? I guess time will tell.