BOJ Predicts Growth to Slow in 2011, Keeps 0.1% Rate

The Bank of Japan kept interest rates unchanged and predicted growth in the world’s second-largest economy will slow next year as fiscal stimulus evaporates worldwide and overseas demand loses steam.

Policy makers raised their growth forecast for the year ending March 2011 to 2.6 percent from 1.8 percent estimated in April, while cutting next year’s to 1.9 percent from 2 percent, the central bank said in a statement today in Tokyo. The board held the benchmark overnight lending rate at 0.1 percent.