The Bank of Japan was expected to stand pat on its key interest rate, analysts said Monday amid general nervousness about the global economy.
As the BOJ began a two-day Policy Board meeting, expectations were high that it will keep its key interest rate at 0.5 percent.
"Raising interest rates is out of the question," said Tomoyuki Ohta, senior economist at Mizuho Research Institute.
"On the other hand, there won't be an interest rate cut either because despite the worries about a slowdown, it's clear it's not as bad as a recession."
Ohta said the BOJ will probably do nothing for about a year unless things change dramatically.
Much of last year, market watchers had expected the BOJ to soon start raising its key interest rate. The global economic turmoil set off at midyear by the U.S. subprime mortgage crisis scotched that view.
High materials costs and gas prices are adding to worries about the economy, although signs about its health have been remarkably solid.
Last week, the government said the economy grew at a stronger than expected 3.3 percent annual pace in the first quarter, racking up its third consecutive quarter of growth.
Ohta and other analysts say the good appearance is deceiving. Consumer spending remains weak and the economy remains dependent on exports, they say. And export growth could stumble if overseas economies falter.
In a speech earlier this month, BOJ Gov. Masaaki Shirakawa made remarks that indicated a rate cut wasn't coming soon.
The central bank "is in a situation that requires us to be extremely watchful of downside risks to the economy," said Shirakawa, who took office in April.