Hi there, today BoJ had cut its interest rate to -0.1%. I read various articles on this topic, however, one line that I read did not made sense to me. It was:
“Some board members of BoJ are reported to have voiced concern that slumping Tokyo stocks could threaten attempts to get firms to boost capital expenditure.”
My question is how could a declining stock market could trigger capital expenditure by firms? What is the relation between both of them?
Anxiously waiting for a prompt reply http://www.economicshelp.org/wp-incl...mple-smile.png
Bye.

What do YOU think ?
While we're happy to HELP we wont do all the work for you.
Show us what you have done and where you are having problems..

Lets say you hold 1,000,00 shares of a $20 stock. Now, it drops to $18. How much have you lost? Not knowing the future, are you ready to use your stock to fund a project? What happens if the stock drops another $5?