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Tokyo. The Bank of Japan kept monetary policy steady and launched a new loan scheme for lenders in the northeast region hit hardest by last month’s devastating earthquake and tsunami.

The central bank also cut its economic assessment and warned of heightening uncertainty over the outlook, signaling its readiness to ease policy further as a nuclear safety crisis and rolling power blackouts hit output and business sentiment.

“Japan’s economy is under strong downward pressure, mainly on production, due to the earthquake,” the BoJ said in a statement after its rate review, revising down its view from last month when it said the economy was emerging from a lull.

“The quake led to sharp declines in output in some areas by damaging plants, disrupting supply chains and constraining power supply. Exports and domestic private demand have also been affected significantly,” it said.

Under the new loan scheme, the BoJ will offer 1 trillion yen ($11.7 billion) in one-year loans at 0.1 percent interest to financial institutions in the quake-hit northeast. It will also consider accepting a wider range of collateral for loans to banks in the area.

The BoJ said details of the scheme would be worked out by the next rate review on April 28 and it would start disbursing loans as early as May.

While the move’s impact on the overall economy may be slim, it will help banks in the area such as Tohoku Bank, Toho Bank, Bank of Iwate and 77 Bank.

As expected, the BoJ kept interest rates unchanged at a range of zero to 0.1 percent by a unanimous vote, and held off on loosening policy further.

Analysts had widely expected the central bank to stand pat on monetary policy after doubling to 10 trillion yen its asset buying scheme just three weeks ago as a pre-emptive measure against the disaster’s economic impact.

With rolling power blackouts and supply-chain disruptions already hitting output, however, analysts say the BoJ may ease policy as soon as its next rate review, when it will also examine its long-term economic and price forecasts.

“At this point, the BoJ doesn’t have enough hard economic data to assess the impact of the quake,” said Naomi Hasegawa, a fixed-income strategist in Tokyo. “But I think it will have enough information by its next meeting.”

She said an easing of policy was possible at the next meeting, with a 5 trillion yen increase in the asset purchase scheme — which buys assets ranging from government bonds to private debt — considered likely.

“This would help the economy,” Hasegawa said.

Market players will scrutinize the news conference of Masaaki Shirakawa, the bank’s governor, for clues on how soon the BoJ will next ease policy.

The BoJ stuck to its view, however, that Japan’s economy will resume a moderate recovery once factory output emerges from a temporary hit and supply constrains ease.

But it added that there was great uncertainty over how the quake could affect Japan’s economic outlook and stressed that it would take action to support the economy when necessary.

Some analysts wondered whether the BoJ was being too optimistic on the outlook and may be too slow in acting despite mounting signs of the severity of the damage.

The government expects material damage from the disaster to reach up to $300 billion, but analysts warn the ultimate cost will be far higher.

With Japan’s huge debt pile narrowing the room for fiscal stimulus, pressure for further monetary easing may also heighten in coming months as the state prepares funds for disaster relief and reconstruction, analysts say.

Economics Minister Kaoru Yosano said the government might ask the central bank for help in the future when its focus shifted to reconstruction efforts from immediate disaster relief.

Reuters