Japan interest rate unchanged

TOKYO, Aug. 19 (UPI) -- Japan's central bank, noting the country's sluggish economy due to inflation and weak exports, Tuesday left its key interest rate unchanged at 0.5 percent.

It was the 18th straight month that the Bank of Japan had made no change in the target rate for unsecured overnight call money.

The bank downgraded its overall assessment of economic conditions for the second consecutive month.

"Economic growth has been sluggish against the backdrop of high energy and materials prices and weaker growth in exports," the bank said, Kyodo new service reported.

But the bank also said the economy "is expected to return gradually onto a moderate growth path as commodity prices level out and overseas economies move out of their deceleration phase."

Earlier this month, the Japanese government in its monthly report said the economy may have entered a contraction phase for the first time since February 2002, the report said.