Tokyo, April 24 (Bloomberg) -- The Bank of Japan will probably hold interest rates steadytomorrow, a month after it lowered rates to near zero and increased the amount of moneyin the banking system to keep growth from stalling, analysts said. All 10 economists, investors and currency traders surveyed by Bloomberg News expectthe central bank to keep the key interbank lending rate, which was recently at 0.015percent, unchanged at its monthly board meeting. Results of the meeting will beannounced tomorrow afternoon, and minutes will be published on June 20. Though the outlook for Japan's economy is dimming -- the central bank lowered itseconomic assessment in April for a second straight month -- that's no surprise to policymakers, analysts said. Instead, investors are focused on the BOJ's twice-yearlyassessment of the economy to be released Thursday. ``There will be no change in policy'' this week, said James Malcolm, a senior analyst atJ.P. Morgan Securities Asia Ltd. ``Our focus is very clearly on the outlook of the BOJ'srisk assessment, and that's going to be much more important than the meeting.'' The BOJ's nine-member board will publish its twice-yearly outlook on economic growthand consumer prices for the year that began April 1 at 8:50 a.m. Japan time on Thursday. The central bank has pledged to keep its current rate policy in place until consumerprices stop falling. The economic report may give an indication of when that's likely tohappen, said Izuru Kato, a market economist at Tokyo Tanshi Ltd.
Policy Clues
``They are looking for clues as to how long the current policy will continue,'' Kato said. In the last report, published in October, the board predicted consumer prices would fallbetween 0.2 percent and 0.4 percent last fiscal year. The bank has since downgraded itsview of the economy to ''stagnant'' from ''moderate recovery,'' suggesting it will forecast asteeper drop in prices for the current year, analysts said. BOJ policy makers have indicated the bank probably won't budge from its current policyfor months. ``Nobody can tell how long it will continue -- six months, one year, two or three years,''Kazuo Ueda, a board member, said last week. Teizo Taya, another board member, told Bloomberg News earlier this month the bankwon't raise rates until economic growth reaches its potential.
Two Years
``We don't think there will be any policy changes for two years or so,'' said ShinichiroKawasaki, an economist at Dai-Ichi Life Research Institute. Consumer prices may stopfalling next year if the yen weakens to between 140 and 150 per U.S. dollar, he said. The yen, which has depreciated 5.9 percent this year, recently traded at 121.57 perdollar. A weakening currency fuels inflation by pushing up the cost of imported goods. Consumer prices in Tokyo, excluding fresh food, have fallen from year-earlier levels for 18months, and wholesale prices have dropped for six months. Falling prices sap economic growth by forcing companies to cut wages and other costs,leaving consumers with less to spend.