Japan holds interest rate at par

The Bank of Japan kept interest rates steady at 0.5%, indicating that the Japanese economy is expected to grow at a slower pace due to weakness in housing investment and cautious corporate sentiment. "The economic recovery cycle led by production, income, and expenditure remains intact. But a slowdown in the Japanese economy is happening now," Bank of Japan Governor Toshihiko Fukui told reporters at a news conference, according to an Associated Press report. The 9-0 vote marked the first unanimous decision since June. The policy board's decision to keep the rate steady was widely expected as the effects of the U.S. subprime-mortgage crisis continue to reverberate in global markets and cloud the outlook for Japan's export-dependent economy, according to the report. Mr. Fukui said the risk of an economic slowdown in the U.S. has increased and that the Bank will closely watch domestic and overseas economies as downside risks in the U.S. and the global economies grow, according to the report.