The Bank of Japan said Thursday it will maintain its “zero-interest-rate” policy, leaving the unsecured overnight call money rate unchanged near zero.

The unanimous decision to maintain the accommodative monetary stance came after the nine-member BOJ Policy Board’s two-day meeting.

“The BOJ will encourage the uncollateralized overnight call money rate to remain at effectively zero percent,” the central bank said in a statement.

The decision was widely expected because the central bank is still assessing whether the economy is strong enough to weather an interest rate hike, analysts said.

But many BOJ watchers still believe the central bank will explore the timing of raising the overnight call money rate at either the July 13-14 or Aug. 10-11 meetings because political events are expected to narrow the window of opportunity for a policy shift in the fall.

Prime Minister Junichiro Koizumi is due to step down in September, when his term as president of the ruling Liberal Democratic Party expires.

The BOJ’s “tankan” quarterly business sentiment survey, due out July 3, is expected to be a crucial factor in the BOJ’s decision.

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