BOJ Decided To Keep The Interest Rate At The Lowest During The Nation's Stability

The Bank of Japan decided to keep interest rates at 0.10% to fight deflation, pointing that monetary policy makers are willing to keep an accommodative policy that will have the power to subdue deflation risks that negatively affected the world's second largest economy.

Moreover, Japanese economy added signs of moderate recovery during the improvement of the global economies, in addition of the rebounded exports and production that boosted the nation's growth in emerging economies and increased global demand for IT related goods.

Corporate and business sentiment noticed higher profits during the improvement of exports and business fixed investment, while the employment and income eased slightly.

Furthermore, private consumption has rebounded alongside the financial conditions, while the public investment and CPI index excluding fresh food are declining on annually basis during the substantial slack in the economy as whole.

Moreover, the central bank of Japan also raised its growth forecast for this fiscal year through March 2011. It now predicts real gross domestic product will expand 2.6%, which rose from a previous expectation of 1.8%.

Meanwhile, faster growth in emerging economies and commodity exporting economies will increase the risk on the nation's economy, in addition of inflations that is expected to raise more than analysts' expectations due to the rise in commodity prices .

BOJ indicated the monetary policy makers at the central bank is facing a " critical challenge " in facing deflation risks that might threat the nation's growth , which might increase the pressure on the monetary policy makers in order to find a suitable policy that keeps the financial marker extremely accommodative.