BoJ leaves key rates unchanged

The Bank of Japan on Tuesday left its key interest rate unchanged at between zero and 0.1 percent and repeated its view that the world's third-largest economy was showing signs of picking up. The central bank, which made the announcement after wrapping up a two-day policy board meeting, said the vote to keep rates unchanged was unanimous. "Japan's economic activity has shown some signs of picking up, although it has remained more or less flat," the BoJ said in a statement. The bank warned that Europe's ongoing sovereign debt problems and global commodity prices remained a concern. It also said it would continue its battle against the stubborn deflation that has haunted the nation's economy for years. "The bank recognises that Japan's economy faces the critical challenge of overcoming deflation and returning to a sustainable growth path with price stability," it said. "The bank will pursue powerful monetary easing, and will support private financial institutions in their efforts to strengthen the foundations for Japan's economic growth," it said. Last month, the bank boosted a loan programme by 2.0 trillion yen ($24.5 billion) to 5.0 trillion yen amid reconstruction efforts seen as crucial to reviving the economy, which was hammered by last year's quake-tsunami disaster and record flooding in Thailand. It has also said it would increase an asset purchase programme by 10 trillion yen ($123 billion) to about 65 trillion yen, while it has also announced a one-year extension to a loan programme for banks in areas hit by Japan's natural disasters. The meeting on Tuesday came amid efforts to fill two vacancies on the bank's policy board after Japan's upper house of parliament last week voted down the nomination of an economist who was not in favour of further monetary easing. The country has seen a mixed bag of economic data lately, reporting on Monday that it swung back to a surplus in February's current account, a key measure of international trade, but confidence among Japan's manufacturers remains weak. The country's factory output in February also tumbled unexpectedly, while Japan logged a surprise trade surplus in the same month, reversing a monster deficit in January.