TOKYO - THE Bank of Japan (BOJ) kept interest rates on hold on Thursday and upgraded its assessment of the economy, as improving exports and output heighten the chance the economy will meet its forecast of a moderate pick-up early next year.
The central bank also upgraded its view on financial conditions, saying they remained severe but were increasingly showing signs of improvement.
The BOJ maintained its view on prices, saying that annual core consumer price falls would narrow in the latter half of the year to March 2010.
The decision to keep rates on hold at 0.1 per cent was made by a unanimous vote.
BOJ Governor Masaaki Shirakawa will hold an embargoed news conference and his comments are expected to come out some time after 4:15pm (0715 GMT, 1515 Singapore time).
Exports and output have bounced back from a steep fall triggered by the global crisis due mainly to solid demand for Japanese goods in emerging countries, helping the economy return to growth in the second quarter.
But analysts warn of a rocky road ahead as the nascent recovery is largely due to the temporary effects of government stimulus measures taken around the globe.
The BOJ has kept interest rates near zero and in July it extended measures aimed at easing corporate credit strains, such as buying commercial paper and corporate bonds from banks, by three months to December.
While credit markets have been on the mend, many market players expect the corporate fund support measures to be extended again beyond December given uncertainty on whether the economic recovery will be sustained after government stimulus effects fade. -- REUTERS
Thursday 17 September 2009
BOJ upgrades economic view
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