The Bank of Japan kept interest rates unchanged on Tuesday as widely expected by markets, and analysts will scrutinise the central bank governor's remarks at a news conference later in the day for clues on the timing of the next rate rise.
The decision to keep the overnight call rate target at 0.50 percent was made unanimously by the nine-member policy board. Financial markets did not react much to the result because few players expected any policy change after the BoJ raised rates last month.
BoJ Governor Toshihiko Fukui will hold a news conference from 3:30 pm (0630 GMT). The central bank raised its key policy rate to 0.50 from 0.25 percent last month by an 8-1 vote, judging that the economy would stay on track for steady growth with prices seen in an uptrend.
The economy has held up well since the rate hike but financial markets have remained volatile, with share prices briefly tumbling and the yen surging in the past few weeks as investors trimmed risk exposure due to uncertainty over the US economic outlook.
In a monthly report released after the rate decision, the BoJ left its assessment of the economy unchanged, saying it is expanding moderately. On consumption, which is seen as the weakest link in the current economic recovery, the central bank also stuck to the previous month's assessment, saying it has been firm.
Market traders will now focus on Fukui's news conference to gauge his view on recent financial market developments and if they could affect monetary policy if they persist. Also under scrutiny is Fukui's view on tame price growth, with recently released data showing year-on-year growth in the core consumer price index grinding to a halt in January. Some analysts expect consumer price growth to turn slightly negative in February.
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