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showing signs of a recovery, as it maintained its stimulative
measures aimed at battling the worst slump in decades. The Bank of
Japan left its key interest rate unchanged at 0.1 percent in a
unanimous decision by the eight-member policy board, it said in a
statement. The Bank has been fighting a severe recession with
super-low interest rates and a policy of buying up corporate debt to
keep credit flowing to firms during the financial crisis. "Japan's
economic conditions are showing signs of recovery," the BoJ statement
said. "Public investment is increasing, and exports and production
are also increasing." "On the other hand, business fixed investment is
declining mainly reflecting weak corporate profits," it added.
Private consumption "remains generally weak amid the worsening
employment and income situation." The comments were slightly more
upbeat than the BoJ's statement last month that economic conditions
had "stopped worsening." Japan's economy returned to positive growth
in April-June, limping out of a year-long recession, but exports and
factory output remain much lower than before the economic crisis and
unemployment is at a post-war high. Deflation has also deepened with
core consumer prices dropping 2.2 percent in July from a year
earlier.
