Japan's central bank today left its key interest rate unchanged at 0.1%, while upgrading its assessment of the world's number two economy for a second month in a row.
'Japan's economic conditions, after deteriorating significantly, have begun to stop worsening,' the Bank of Japan said in a statement. 'Japan's economy is likely to show clearer evidence of levelling out over time,' it added.
Last month, the central bank upgraded its assessment for the first time in almost three years, saying: 'Economic conditions have been deteriorating, but exports and production are beginning to level out.'
Recent economic data has shown a mixed picture for the Japanese economy, which has been hit hard by the global downturn but with many analysts now predicting it will stabilise in the current quarter.
The Bank of Japan, which made the rate decision by a unanimous vote, said it would continue 'paying attention for the time being to the downside risks to economic activity and prices.'
Japan's industry ministry yesterday improved its assessment of the business climate for the first time in more than three years.
The government said last Thursday that Japan's economy shrank less than initially thought in the first quarter of 2009, but still logged its sharpest contraction on record, shrinking an annualised 14.2%.
The economy, which has been in recession since the second quarter of 2008, shrank by a revised 3.8% in the three months to March, compared with its earlier estimate of 4%.
