Japan likely to leave interest rates on hold

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TOKYO, Aug 18 (AFP): The Bank of Japan (BoJ) is likely to leave interest rates on hold when it meets next week because of continued uncertainty about the US economy, a news report claimed yesterday, "BoJ policymakers have no choice but to skip an interest rate hike this month as they cannot assess the course of the world's biggest economy," Jiji Press agency reported late Friday, citing unnamed sources close to the BoJ's Policy Board.
On the Tokyo Stock Exchange Friday, the 225-issue Nikkei average nosedived 874.81 points, or 5.4 per cent, from Thursday to end at 15,273.68, the lowest close since April 7, 2006. The Nikkei has lost about 3,000 points from its level at mid-July, when the BoJ last held a monetary policy meeting.
The policy board members are believed to have tilted toward taking a stance of keeping a close eye on developments in global financial markets, which have been in turmoil this week because of US subprime mortgage woes, the Jiji report said.
In July, the BoJ left its super-low interest rates on hold for a sixth straight meeting, opting to wait for further evidence that the economic recovery is taking root.