The Bank of Japan kept interest rates steady and held off on new policy steps today but said it will take appropriate and timely action when necessary.
In a statement on its rate decision, the BOJ repeated that it needed to watch out for downside risks to Japan's economy as uncertainty heightens over the US economic outlook, which has led to unstable moves in currency and stock markets.
But it kept its assessment on the Japanese economy unchanged, saying it was showing further signs of a moderate recovery.
As widely expected, the BOJ kept interest rates at 0.1 per cent in a unanimous vote.
The BOJ boosted its cheap loan scheme at an emergency meeting on August 30th, bowing to government pressure for action to protect a fragile recovery after the yen's surge to a 15-year high against the dollar.
But the move did little to deter yen gains or falls in stock prices as investors saw it as a symbolic gesture that had barely any effect in supporting the economy.
The BOJ is gearing up for further monetary easing next month but is no mood to act before that unless the yen rises at a pace of 1 to 2 per cent in a single day towards its all-time high above 80 to the dollar.
Reuters