Tokyo, Jul 28 (AP) Japan's central bank opted Friday to keep its benchmark interest rate at minus 0.1% but said it will fine-tune its bond purchases to allow greater flexibility.

The Bank of Japan said that extremely high uncertainties for the economy and prices required a more nimble approach than its previous policy.

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It said it would offer to buy 10-year Japanese government bonds at 1% each business day, instead of the upper limit of 0.5% that was imposed under its “yield curve control program.”

It said its aim is still to keep long-term interest rates near zero percent.

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The BOJ has been under pressure to adjust its policies as Federal Reserve and other major central banks have raised interest rates to curb inflation. Japan's inflation rate has lagged those in the U.S. and Europe but is now over 3%, adding to those pressures.

Meanwhile, the gap between Japan's negative benchmark rate and rates in the U.S. has caused the Japanese yen to weaken against the U.S. dollar, adding to price pressures in Japan and raising costs for consumers and manufacturers given the country's heavy reliance on imports whose prices have risen sharply since the pandemic.

Markets wobbled ahead of Friday's announcement. Afterward, shares fell in Tokyo and the Japanese yen weakened against the US dollar. (AP)

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)