Bank of Kapan Keeps Key Interest Rate at Zero

Posted November 16th, 2011 at 10:40 pm (UTC-5)
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Japan's central bank has kept its key interest rate at virtually zero in a widely expected decision.

Bank of Japan Governor Masaaki Shirakawa said Wednesday the bank's policy board members voted unanimously to maintain the short-term interest rate at 0 to 0.1 percent. He spoke to reporters after the policy board's two-day meeting.

The Bank of Japan also lowered its assessment of the country's economy. Shirakawa said Japan's economic activity has continued to grow, but at a more moderate pace, mainly due to the effect of a slowdown in overseas economies.

He also expressed concern about emerging economies and their ability to control inflation amid rapid growth.

Board members concluded that the economy will face an adverse effect from the appreciation of Japan's currency, the yen. Shirakawa said recent floods in Thailand will hurt Japanese manufacturers who had just begun to recover from the march earthquake and tsunami at home.

The Bank of Japan also expressed concern that the European debt crisis could have a negative effect on the global economy.