Bank of Japan is to keep interest rates at a low

The central bank in Japan today said it would fight the country's zero inflation and promised to keep its monetary policy "very easy", meaning interest rates would remain low for the foreseeable future.

Deflation in Japan is seen as persisting and the nation is fretting about weakness in the economy. The Bank of Japan is widely expected to look at loosening monetary policy further next year when the effect of its domestic stimulus wears out.

The country has experienced deflation for much of the past decade and the current price slump is expected to last for three years at least, risking another recession.

The BOJ has interest rates at 0.1%, a rate expected by some to last until 2012.