The Bank of Japan said its policy board voted by a majority today to keep its ultra-easy credit policy unchanged, showing a minority of members continue to press for a change in the liquidity target. As expected, the nine-member board voted to maintain a liquidity target of 30-35 trln yen, but to allow the amount to temporarily drop below that range when market conditions warrant. "The Bank of Japan will conduct money market operations, aiming at the outstanding balance of current accounts held at the bank at around 30 to 35 trln yen," the BoJ said in a statement. "When it is judged that liquidity demand is exceptionally weak considering such factors as responses of financial institutions to the bank's funds-supplying operations, there may be cases where the balance of current accounts falls short of the target," it said. The decision means the BoJ will continue to keep short-term interest rates around zero by flooding the short-term money market with excess cash. The policy is aimed at ending Japan's seven-year battle with deflation. No change in the fundamental zero-rate policy was expected. But financial markets were watching to see whether the board would vote to lower the liquidity target which has become so difficult to maintain.The liquidity figure is the target range for the outstanding balance of current account deposits held by private financial institutions at the central bank. The BoJ began targeting liquidity, instead of focusing primarily on interest rates, four years ago in a bid to rid the Japanese economy of deflation. It increased the liquidity target several times over past years as fears peaked about a collapse of the Japanese banking system because of then-soaring bad debts. In recent months, however, expectations began building that the BoJ may vote to lower the target because of the difficulty it was facing in keeping the current account balance within the stipulated range. The BoJ has failed repeatedly this year to inject the desired amount of liquidity into the system through its daily money-market operations, as commercial banks balked at subscribing for the full amounts. Analysts say that's because private banks no longer feel compelled to keep massive excess reserves as insurance against a run on deposits being triggered by a bank failing. But a majority of board members are concerned it might be interpreted as a first move toward tightening credit, something BoJ chief Fukui has vowed won't happen until deflation is thoroughly vanquished and the economy is growing steadily. Earlier this week the government revised its estimate of Japanese economic growth in January-March to a real, annualized rate of 4.9 pct, down from an initially estiamted 5.3 pct but still the fastest pace in a year. But deflation continues to haunt Japan, and is projected to remain a problem until next year. The nationwide core consumer price index (CPI), the central bank's key indicator of price trends, fell 0.2 pct in April from a year earlier. In its latest twice-yearly Outlook for Economic Activity and Prices, the BoJ said it expects core CPI to fall 0.1 pct this fiscal year, but rise 0.3 pct in the year to March 2007. The current-account deposit balance briefly dipped below 30 trln yen on June 2 and 3, due to an outflow of more than 3 trln yen in corporate tax payments during that period.