Bank of Japan Keeps Key Rate at 0.5%


The Bank of Japan voted 8-1 on July 12 to keep its benchmark interest rate unchanged as it waits for more proof that economic growth will be sustained and inflation will take hold.

Governor Toshihiko Fukui and his policy board colleagues held the key overnight lending rate at 0.5 percent at a two-day meeting that ended today, the central bank said in Tokyo.

Policy makers are confident in their outlook for the economy, though they want to examine more data before increasing borrowing costs, Fukui said. The Bank of Japan will probably raise the key rate, the lowest among major economies, next month, according to economists and investors.

``Governor Fukui's commitment to raising interest rates will remain firm,'' said Yasunari Ueno, chief market economist at Mizuho Securities Japan Co. ``Any proposals for a rate hike support expectations of an August move.''

 


Bloomberg
7/12/2007 12:24:30 PM