Amid a worldwide slump in share prices, the Bank of Japan announced Friday it will keep its monetary policy unchanged, maintaining its wait-and-see attitude as it continues to pump excess funds into money markets.
The decision comes as the nation's economic outlook becomes increasingly uncertain and as signs of downturns in overseas markets, particularly the United States, grow more ominous.
Not only have corporate accounting scandals triggered falls in share prices, but U.S. economic indicators for August show weakening consumer confidence and downturns in nonmanufacturers' business assessments.
The central bank will keep force-feeding money into private-sector banks' current accounts at the BOJ to keep the balance at between 10 trillion yen and 15 trillion yen, the BOJ Policy Board decided in a unanimous vote.
Despite weak domestic demand, board members are expected to have upwardly revised their assessment of the economy for the sixth month in a row, based on improvements in industrial production indicators.
But concern over the nation's outlook is still growing. Signs of weakness in the U.S. are bad news for the nation's export-dependent economy.
Since March 2001, the BOJ has been injecting ample liquidity into money markets in the hope that some of the funds will find their way to companies and individuals, stimulate demand and halt price falls.