Bank Of Japan Expands Funding Operation, Holds Rates

The policy board of the Bank of Japan on Wednesday unanimously decided to retain the overnight call rate at 0.10%, in line with market expectations.

The last change in the rate was a 0.10% cut in interest rates at the December 2008 meeting.

The central bank also unveiled an expansion to a bank lending operation put in place in December to facilitate corporate financing, by "substantially increasing" the amount of funds to be provided through its fixed-rate operation.

It comes after incessant pressure from the government to ease monetary conditions further so as to prevent an appreciation in the yen and a deeepening of the country's deflationary woes.

The bank again repeated its vow to fight deflation and widely retained its economic assessment.

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