Japanese central bank holds key rate at 0.1%

TOKYO, Jan. 26 (Xinhua) -- Japan's central bank decided Tuesday to hold its key interest rate unchanged at 0.1 percent as widely expected.

At the Bank of Japan (BOJ)'s two-day policy meeting, the seven- member Policy Board voted unanimously to keep the rate steady, the bank said in a statement.

It is the 13th consecutive month that the rate has been left unchanged. BOJ last cut its target rate for unsecured overnight call money in December 2008, lowering the rate from 0.3 percent.

The bank also maintained its stance that economic conditions in Japan are "picking up."

"The Bank's baseline scenario projects that the pace of improvement of the economy is likely to remain moderate until around the middle of fiscal 2010," the BOJ said in the statement. "Thereafter, as improvements in the corporate sector originating from exports are expected to spill over to the household sector, the growth rate of the economy is likely gradually to rise."

The BOJ also said it believes prices are likely to moderate as the situation for the economy slowly improves, while noting that deflation remained a serious risk for the economy and said it would "continue to consistently make contributions" to tackle the problem.