Asia-Pacific

Japan's central bank keeps low interest rates

(Xinhua)
Updated: 2011-05-20 17:01

TOKYO - The Bank of Japan on Friday opted to keep its key interest unchanged despite news on Thursday that Japan' economy had contracted for a second quarter technically meaning the nation is in recession.

The central bank is sticking to its view however that the nation's economy will bounce back later in the year.

Following a two-day policy meeting the bank's board decided unanimously to maintain its ultra-easy monetary policy with rates at between zero and 0.1 percent and continue its 10 trillion yen asset purchasing scheme to help bolster investor confidence and lessen long-term interest rates.

"Japan's economy faces strong downward pressure, mainly on the production side, due to the effects of the earthquake disaster," the central bank said in an official statement released with the policy decision.

The bank added however that it will remain vigilant for any downward pressure on the domestic economy from the disasters.

"The bank will continue to carefully examine the outlook for economic activity and prices, including the effects of the disaster, and take appropriate policy actions as necessary," the BOJ said.