The Bank of Japan (BOJ) decided on Thursday to keep its key interest rate steady at 0.1 percent.

During a one-day panel meeting, eight members of the central bank's policy board voted unanimously to hold the overnight call rates unchanged.

Also at the policy meeting, the BOJ lowered its projections for the nation's economy, predicting a 3.1 percent year-on-year contraction for its real GDP in fiscal 2009, against a previously estimated 2.0 percent shrinkage.

In January, the central bank predicted the worst negative growth in the postwar era. But as the economic recession deepened, the central bank revised its forecast downward.

Meanwhile, the BOJ also sounded a warning about deflation as it projected a 1.5 percent contraction in the consumer price index, excluding volatile fresh food prices, up from the previously predicted 1.1 percent fall.

(Xinhua News Agency April 30, 2009)