Bank of Japan board members voted Monday to keep interest rates unchanged.
"At the monetary policy meeting held today, the Bank of Japan decided, by majority vote, to maintain the following guideline for money market operations for the inter-meeting period:
"The Bank of Japan will encourage the uncollateralized overnight call rate to move on average around 0.25 percent," the central bank said in a statement after a meeting lasting nearly five and a half hours.
The Bank of Japan in August abandoned its 18-month-old policy of driving the overnight call rate, at which commercial banks lend to each other, close to zero.
The decision marked the first time in 10 years that the central bank had lifted borrowing costs in Japan, whose economy has been depressed since a speculative boom collapsed in the early 1990s.
No change was expected at the latest meeting and the yen was unaffected, fetching 108.62 against the dollar around 3:40 pm (0640 GMT), compared to 108.73-75 yen early in Tokyo.
"The market hardly reacted following the BoJ meeting. It did not expect the BoJ to make any policy changes," said Mitsuru Sahara, vice president of Sanwa Bank's foreign exchange division.— (AFP)
© Agence France Presse 2000
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