Japan's central bank has left its key interest rate unchanged at 0.1%, saying the world's second largest economy 'has started to pick up'.
But the Bank of Japan made no mention of whether it would extend its emergency measures aimed at keeping credit flowing to struggling companies during the economic downturn.
The bank has been fighting the fall-out from the global economic downturn with super-low interest rates and a scheme - due to expire at the end of this year - to buy company debt.
Analysts expect some of the extraordinary steps to be wound down soon as the worst of the credit crunch appears to have passed and the economy returned to positive growth in April-June, emerging from a year-long recession.
But they say an interest rate rise looks unlikely anytime soon in Japan, where borrowing costs have been kept very low for years to support a sluggish economy.
The BoJ will be anxious not to repeat its blunder of August 2000, when it raised interest rates too soon and was later forced to reverse the decision as the economy started to worsen again.
The bank noted that government investment has been rising, along with exports and factory production. But private consumption 'remains generally weak amid the severe employment and income situation,' the bank said.
