BoJ may not hike interest rate

TOKYO: Traders scaled back expectations of a rate rise by the Bank of Japan this month as concern about international credit markets mounted.

The BoJ injected funds into the money market on Friday in an attempt to instill calm as Tokyo share prices tumbled and prices of relatively safe government bonds rose in reaction to problems spreading from the US subprime mortgage sector.

Swap contracts on the call rate were pricing in around a 35% chance of a rate rise this month, down from about 75% on Thursday.