Forex News – Bank of Japan keeps interest rates unchanged

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The Bank of Japan announced its key interest rate this morning, which as widely expected, it decided to maintain at a range of zero to 0.1 percent. The central bank decided by a unanimous vote not to loosen monetary policy further and maintain it as it is. Instead it decided to extend by six months a 1 trillion yen ($13 billion) loan scheme targeting banks operating in the area hit by Japan’s devastating March 11 earthquake and tsunami.

The central bank said Japan’s economy would resume a moderate economy but issued a slightly stronger warning about overseas growth than in its statement after last month’s policy meeting.

“Overseas economic growth is expected to slow for the time being but will remain firm as a trend, led by emerging economies,” the BOJ said in a statement issued after the rate decision.

Governor Masaaki Shirakawa will hold an embargoed news conference today, with his comments expected to come out sometime after 0715 GMT.

The central bank eased policy in August by boosting asset purchases, on the same day Tokyo intervened in the currency market to stem the yen’s sharp rise. The Japanese currency has remained stable since then. After today’s interest rate announcement the yen remained steady as the BoJ policy decision was as anticipated.