BoJ ups assessment

The Bank of Japan kept its key lending rate at 0.10% as expected but raised its assessment of the economy for the second time this year.

Policymakers at the BoJ conceded that domestic demand has continued to weaken but overall conditions "have begun to stop worsening." The central bank added that production turned upward, and public investment has also increased.

In the coming months, the BoJ noted that Japan's economy is likely to show clearer evidence of leveling out over time. Meanwhile, financial conditions have generally remained tight, although there have been signs of improvement.

The recession in the US has eased but the nascent optimism emanating from Japan's central bank is probably coming from the modest pick up in China's economy.