Japanese interest rates have been kept on hold at 0.5 percent for the sixth consecutive time, reflecting caution about future economic prospects.

Policymakers at the Bank of Japan (BOJ) voted eight to one to freeze rates in line with market expectations. Japan's economy has recovered over the past year, raising hopes that it has overcome a long period of deflation. But recent signals have been poor and the BOJ stressed current and future economic growth was both moderate. -------------------- Gradual approach Leading figures in Prime Minister Shinzo Abe's government have urged restraint on the BOJ, arguing that precipitous rises in rates could derail the economic turnaround. This has led to claims of undue political pressure on Bank officials. Recent economic indicators have been mixed. Industrial output fell 0.3 percent in May while core consumer prices have declined in each of the past four months but business confidence has remained strong. Bank officials have pledged that further adjustment of monetary policy -- which began last year when the longstanding 0 percent rate policy was abandoned -- will be gradual. But many analysts believe policymakers will act at their next meeting in August, after July's parliamentary elections are out of the way. "This does not mean an August hike is off the cards," said Sharada Selvanathan, currency strategist at BNP Paribas. Leading Japanese shares fell after the announcement, the benchmark Nikkei index dropping 65.37 points to 17,984.14 while the yen dipped against leading currencies. One analyst said the fact that only one member of the BOJ committee had voted against the decision may reflect a less hawkish attitude to rates. (Source: BBC