TOKYO Oct 7 The Bank of Japan kept monetary policy unchanged on Friday, holding off on tapping its depleted policy arsenal for now although fears of a global recession and Europe's debt crisis are clouding the outlook for the fragile economy.
The central bank said Japan's economy would resume a moderate economy but issued a slightly stronger warning about overseas growth than in its statement after last month's policy meeting.
"Overseas economic growth is expected to slow for the time being but will remain firm as a trend, led by emerging economies," the BOJ said in a statement issued after the rate decision.
As widely expected, the central bank maintained its key interest rate at a range of zero to 0.1 percent by a unanimous vote and refrained from loosening policy further via an expansion of its asset buying scheme.
The BOJ also decided to extend by six months a 1 trillion yen ($13 billion) loan scheme targeting banks operating in the area hit by Japan's devastating March 11 earthquake and tsunami. The scheme was due to expire at the end of this month.
Governor Masaaki Shirakawa will hold an embargoed news conference, with his comments expected to come out sometime after 4:15 p.m. (0715 GMT).
The central bank eased policy in August by boosting asset purchases, on the same day Tokyo intervened in the currency market to stem the yen's sharp rise. It has stood pat on policy since then.