Uncertainty in global markets prompted the Bank of Japan to skip a rate rise today.
The Bank of Japan left its key policy rate unchanged for the sixth month running in the wake of a global markets shake-out stemming from subprime mortgage problems in the United States.
That has raised concerns that a US downturn would reduce demand for Japanese goods.
The central bank kept to its view that the world's second-biggest economy was expanding moderately, although it noted long-term interest rates and stocks have fallen on increased global uncertainties.
Just a month ago, investors had widely expected the Bank of Japan to raise interest rates in August to 0.75 per cent from 0.5 per cent.
In a further sign that pressure on money markets is easing, Australia's central bank today injected less cash into the banking system than in previous days.
The mood in the region's markets mirrored a relative calm in global money markets yesterday, when investors ditched some safe-haven positions and the four largest US banks made a show of support for the Federal Reserve.
Asian stocks jumped on Thursday with markets from Seoul to Sydney posting gains of more than 2 per cent after signs that US takeover activity could soon recover boosted Wall Street on Wednesday.