Top > Business > 2006 > June > 2006-06-18

Japan Central Bank Leaves Rates Alone

The Bank of Japan decided Thursday to leave its key interest rate at zero, saying current global economic conditions don`t yet warrant a change. The Bank of Japan?s policy board voted unanimously to keep the interest rates stable even as political problems continue to follow Bank Governor Toshihiko Fukui. Opposition politicians continue to call for his resignation, though the likelihood of him actually resigning is up for speculation.

Mr. Fukui confessed to investing 10 million yen (a little more than $87,000) in a fund operated by Yoshiaki Murakami, who was arrested last week on the island nation for alleged insider trading. As a result of this confession, Mr. Fukui was expected to address the Japanese Parliament`s budget committee in Tokyo on Thursday about concerns over his credibility in the wake of the Murakami scandal and his role in it.

And while the Bank of Japan decided to leave interest rates at zero for the moment, the central bank has pledged to raise Japanese interest rates sometime in the future, at least as soon as the Japanese economy shows signs of stable inflation. The Bank of Japan, however, has been advised by Prime Minister Junichiro Koizumi to go slow, so that higher borrowing costs don`t affect Japanese companies.