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Bank of Japan holds key policy rate before Greek vote

A man walks past the Bank of Japan headquarters in Tokyo June 15, 2012.

YURIKO NAKAO/REUTERS

The Bank of Japan kept monetary policy unchanged on Friday, saving its financial firepower in case Greek elections over the weekend ignite fresh market turmoil that threatens Japan's recovery prospects.

The BOJ revised up its assessment of Japan's economy to say it has started picking up moderately. But the central bank warned that global economic uncertainty remains high and that markets remain jittery due to worries over Europe's sovereign debt problems.

"The BOJ will do its utmost to ensure the stability of Japan's financial system, while paying particular attention to developments in global financial markets," the central bank said in a statement.

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As widely expected, the BOJ maintained its key policy rate in a range of zero to 0.1 per cent by a unanimous vote, and held off on easing monetary policy further.

BOJ Governor Masaaki Shirakawa will hold an embargoed news conference later on Friday with his comments expected to come out some time after 4:15 p.m.

The BOJ eased policy in February and April via increases in its asset-buying program in largely symbolic moves to show its determination to achieve its 1 per cent inflation target.

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