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Bank of Japan keeps rates steady

Bank of Japan keeps rates steady

TOKYO — Japan’s central bank kept its interest rates steady today, a day after its American counterpart made a bigger-than-expected rate cut, quieting jitters about a U.S. credit crunch and sending Tokyo stocks soaring.

The Bank of Japan’s policy committee voted 8-1 to keep the overnight call rate at 0.5 percent, a bank official said at the end of the two-day meeting.

Hirokata Kusaba, senior economist with Mizuho Research Institute in Tokyo, noted that the Bank of Japan wasn’t likely to raise interest rates right after the Federal Reserve’s rate cut. But he said that once global markets stabilize, the Bank of Japan is likely to resume raising rates, perhaps later this year.

"The major concern for the Japanese economy is that a slowdown in the U.S. economy may bring down external demand," he said.

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