TOKYO (Commodity Online); The Bank of Japan (BoJ) has kept rates unchanged and the policy board said that it will encourage teh uncollateralised overnight call rate to remain at around 0 to 0.1%.

The bank has kept interest rates at O levels with a view to raise inflation rate to 2%. "The Bank recognizes that the inflation rate consistent with price stability on a sustainable basis will rise as efforts by a wide range of entities toward strengthening competitiveness and growth potential of Japan's economy make progress. Based on this recognition, the Bank has set the price stability target at 2 percent in terms of the year-on-year rate of change in the Consumer Price Index (CPI)," according to a BOJ press release.

With regard to the outlook, Japan's economy is expected to level off more or less for the time being, and thereafter, it will return to a moderate recovery path mainly against the background that domestic demand remains resilient partly due to the effects of various economic measures and overseas economies gradually emerge from the deceleration phase. For the time being, the year-on-year rate of change in the CPI is expected to turn negative due to the reversal of the previous year's movements in energy-related and durable consumer goods, and thereafter, it is likely to be around 0 percent again, the release added.