Posted on: Saturday, July 14, 2001

Japan's central bank keeps monetary policy unchanged

Associated Press

TOKYO — Despite growing worries about the deteriorating Japanese economy, the central bank decided Friday to keep monetary policy unchanged.

The Bank of Japan made that decision at a two-day policy board meeting ending Friday, while acknowledging it was prepared to inject more cash into the financial system if the situation worsens.

The bank has kept that view since it lowered interest rates to zero in March. Some politicians have repeatedly urged more action, but it has been reluctant to do so.

The government said Wednesday in a monthly report that the Japanese economy is "deteriorating" as business investment peaks, consumer spending weakens and exports fall.

Japan has been unable to wrest itself out of a slowdown that has continued for more than a decade. Its top banks are laden with bad debts, and unemployment has hit a record high 4.9 percent.

The benchmark 225-issue Nikkei Stock Average slid 52.80 points, or 0.43 percent, to finish at 12,355.15.