Bank of Japan keeps key interest rate unchanged

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The move, coming after a two-day meeting, was widely expected.

Given soaring oil prices, a murky outlook for Japan's economy and sluggishness in the U.S., a key export market, many economists expect the BOJ will keep rates on hold for awhile.

Japan's benchmark interest rate is the lowest among Group of Eight industrialized nations, whose finance ministers are holding a two-day meeting starting Friday in Osaka to discuss oil, rising food prices and the global economic slowdown.

The currency market reacted little to the BOJ's decision. The dollar was changing hands at 107.72 yen early Friday afternoon in Tokyo, down from 107.89 yen in New York late Thursday.

The central bank last raised its key rate from 0.25 percent in February 2007.