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Wednesday, 8th September 2010
In Business In Japan,

Bank of Japan holds interest rates

The Bank of Japan has opted to leave interest rates unchanged amid signs of a slow recovery.

According to the country's central bank, keeping the key rate of interest at 0.1 per cent could encourage stability, especially as the economy begins a moderate recovery.

However, the bank did not rule out possible policy steps if the yen continues to remain strong against other currencies.

"We are aware that Japanese exporters have been significantly affected by the yen's strength," said Bank of Japan's governor Masaaki Shirakawa.

He added: "We are very carefully watching the impact of the stronger yen on the Japanese economy."

Foreign exchange markets have seen the yen climb to a 15-year high against the US dollar as well as performing strongly against the euro. This has increased concerns about the potential negative impact on Japan's export levels.

Meanwhile, Japanese government bond yields fell on Tuesday after the interest rate decision and the news that the central bank would consider further monetary easing.

Written by Mark Smith 

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