The Bank of Japan said Tuesday it will keep its key interest rate at 0.1 percent and maintained the economy still shows signs of recovery, but also warned of downside risks amid growing concerns over the U.S. economic outlook and the stronger yen.
In a statement issued after a two-day policy meeting, the BOJ referred to "downside risks such as those related to international financial developments," apparently keeping in mind the yen's recent appreciation and the financial woes in Europe.
While voting unanimously to keep the target rate for unsecured overnight call money, a level unchanged since December 2008, the BOJ Policy Board maintained that "Japan's economy shows further signs of a moderate recovery."