Japan's central bank has kept its key interest rate unchanged, saying it will assess the impact of earlier measures to boost the economy amid fears of a looming slowdown.
The bank's board made the unanimous decision to keep the key rate at between zero and 0.1% after a two-day meeting, warning that a fragile recovery from deep recession was 'pausing'.
'The bank will continue to carefully examine the outlook for economic activity and prices, and take policy action in an appropriate manner,' the BoJ said in a statement released together with the rate announcement.
The decision followed the BoJ's move in October to adopt a near zero rate policy and a five trillion yen ($60 billion) asset purchase scheme to lower borrowing costs and help tackle deflation. The move added to a previous 30 trillion yen scheme to boost liquidity and spur growth.
The central bank has only just begun its programme of asset purchases announced in October that includes government and corporate bonds and riskier exchange traded funds (ETFs) and real estate investment trusts (REITS).
Analysts say the move has contributed to the more positive mood in asset markets generally. Japan's Nikkei index has rebounded above the 10,000 level in recent weeks.
But several economists expect the central bank to be forced to ease policy further - such as by expanding its new asset-buying facility - early next year, as the economy faces the threat of a slowdown.
There also remain challenges of slowing export growth and falling industrial production due to weakening overseas demand, while the expiration of government incentives for environmentally friendly cars has also hit demand at home.
Japan, which heavily relies on exports of cars, electronics and machines, has been hit by a strong yen, which makes its goods less competitive abroad and erodes companies' overseas profits when repatriated.
