12 Aug 2009

Interest rates kept on hold in Japan

9:19 am on 12 August 2009

The Bank of Japan has kept its key interest rate unchanged and underlined a cautious outlook for the economy.

The board of the central bank unanimously opted to kept interest rates at 0.1% after a two-day meeting.

The BoJ said conditions in Japan have stopped worsening, but unemployment would stay high and consumer spending low.

The bank also said that consumer prices were still falling. Figures for the year to 30 June showed a record fall of 1.7% in consumer prices, largely as a result of falling fuel prices.

The BBC reports interest rates have been on hold since December, when rates were reduced from 0.3%.

Last month, the bank forecast that the economy would shrink by 3.4% in the 12 months to 31 March 2010.