Japan holds steady on rates, policy

TOKYO - Agence France-Presse

A man quenches thirst as he looks at a stock board of a securities firm in Tokyo. AP photo

The Bank of Japan (BoJ) yesterday kept interest rates unchanged and held off further easing measures, repeating its view that the world’s third-largest economy was “picking up moderately.”

The BoJ kept rates at between zero and 0.1 percent and left unchanged its key policy tool, a 70-trillion-yen ($891-billion) asset purchase program, after a two-day policy meeting.

“Japan’s economy has started picking up moderately as domestic demand remains firm mainly supported by reconstruction demand (following last year’s quake-tsunami disaster),” the bank said in a statement.

Nervousness continues

The central bank said that “overseas economies have shown moderate improvement” but added that “in global financial markets some nervousness continues to be seen, mainly due to concern about the European debt problem.”

The BoJ’s decision was largely in line with market expectations, and came after the US Federal Reserve and European Central Bank also held off fresh measures following recent policy meetings.

Meanwhile, Japan’s core machinery orders rose by a smaller-than-expected 5.6 percent in June from the previous month, official figures showed yesterday.

The rise in the private-sector core data, which exclude volatile demand from power companies and for ships, reversed a fall of 14.8 percent in May but was smaller than 11.0 percent growth expected by economists polled by Dow Jones Newswires.