ISTANBUL

The Bank of Japan decided to keep its policy interest rate steady at 0.25%, according to an official statement on Friday.

The bank underlined that the Japanese economy has recovered moderately but some weaknesses still remain.

The BoJ said exports and industrial production are flat but the employment and income situation has improved and private consumption is on a moderate upward trend, yet housing investment has been relatively weak.

Public investment has been more or less flat, and financial conditions have been accommodative, the bank said, adding: "On the price front, the year-on-year rate of increase in the consumer price index has been in the range of 2.5-3.0 percent recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned."

Inflation expectations rose moderately, it noted.

The bank had been keeping the rate at minus 0.1% since 2015 but decided to increase the rate to 0.1% at its March meeting and then raised it to 0.25% in July, its highest level since end-2008.