The economic rebound of Japan “has paused”, according to the central bank, which left the key rate unchanged at between 0 and 0.1 percent.
The main reasons come from the effects of a slowdown in international economies and the record-strong yen, The Bank of Japan said.
Europe is currently one of the big problems of the global economy. "The sovereign debt problem in Europe could result in weaker growth not only in the European economy but also in the global economy, particularly through its effects on global financial markets," it said.
The whole context is making Japan appear hesitant for the coming period. "Improvement in business sentiment has slowed on the whole despite steady improvement in domestic demand-oriented sectors."
Japan's economic activity will remain more or less flat for the time being. After that, the economy is expected to return to a moderate recovery path as the pace of recovery in overseas economies picks up, led by emerging and commodity-exporting economies and as reconstruction-related demand after the earthquake disaster gradually materializes, according to The Bank of Japan.