The Bank of Japan on Tuesday revised downward its economic growth forecasts for fiscal 2011 from 0.3 to minus 0.4 percent, citing the impact of Europe's sovereign debt issues and the yen's appreciation.
At its two-day Policy Board meeting, the BOJ also lowered its growth projection for fiscal 2012 from 2.2 percent to 2.0 percent and members unanimously agreed to maintain the central bank's zero interest rate policy.
"Overall, there still is strong uncertainty remaining" over Europe, BOJ Gov. Masaaki Shirakawa said during a news conference following the Policy Board meeting. "As I have stated on previous occasions, (Europe's sovereign debt crisis) remains the largest risk factor" for Japan's economy.