BOJ keeps rates on hold, skips new initiatives
reuters.com, 18 February, 2010
Rie Ishiguro, Leika Kihara and Hideyuki Sano, 18 February 2010
The Bank of Japan kept interest rates on hold and held off on new policy initiatives on Thursday as widely expected, but persistent deflation is likely to keep government pressure simmering for more action.
The central bank maintained its commitment to keep monetary conditions very easy in a statement announcing the rate decision and vowed to do its utmost to pull Japan out of deflation.
The decision to keep rates on hold at 0.1 percent was made by a unanimous vote of the BOJ policy board as widely expected. The central bank also stuck to its economic assessment, saying the pace of recovery will gradually pick up from later this year.
Governor Masaaki Shirakawa will hold an embargoed news conference later, with his comments expected to come out around 4:15 p.m. (0715 GMT).
Japan's economy grew a faster-than-expected 1.1 percent in October-December from the previous quarter due to a stimulus-fuelled rebound in domestic demand and corporate investment.
But markets focused on a record 3 percent annual fall in the GDP deflator, a broad gauge of price trends, as a sign that the gap between supply and demand was pushing Japan deeper into deflation.
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