TOKYO, Sept 12 - The Bank of Japan kept monetary policy unchanged on Friday after a two-day meeting, maintaining its reserves target for the banking system with a commitment to provide more liquidity if needed. The decision was expected after a series of strong economic growth figures and a rally on the Tokyo stock market, which had raised speculation that the central bank would see no need for further easing. The BOJ said it would keep its reserves target -- for the volume of current account deposits held by banks at the central bank -- at 27-30 trillion yen ($231-256 billion) but would provide more funds in the event of instability in the financial system.
It also said the central bank would consider extending the maturity of Japanese government securities with repurchase agreements and report the results at the next monetary policy meeting. The policy decision was by a majority, the BOJ said. There is some speculation in financial markets that the BOJ may soon tighten policy, but Governor Toshihiko Fukui has stressed that the central bank will maintain its current "quantitative easing" framework until the year-on-year change in consumer prices stabilises above zero percent.//