Japan economy ‘recovering moderately’, BoJ holds pat on stimulus

PHOTO: Japan economy ‘recovering moderately’, BoJ holds pat on stimulus

TOKYO - The Bank of Japan on Thursday issued an upbeat assessment of the world's third-largest economy, saying it was "recovering moderately", and held off expanding its huge stimulus programme.

The central bank's board voted unanimously to stand pat after wrapping up a two-day policy meeting, as investors keep a close eye on the US Federal Reserve, with many expecting it to soon start winding down its own monetary easing programme.

There was little movement in the yen on currency markets as the BoJ said its earlier view that Japan's prospects were improving remained on course. "Japan's economy is recovering moderately," the BoJ said in a statement, adding that economies overseas "as a whole are gradually heading toward a pick-up".

The brighter global outlook as well as an ongoing weakening of the yen has helped boost Japan's shipments to key markets. The weaker currency came as Tokyo unleashed a fresh bid to stoke the long-lumbering economy with big government spending and massive central bank monetary easing.

On Thursday, the BoJ said key indicators including business investment and consumer demand were looking brighter, a good sign as Japanese officials work to vanquish years of deflation that has curbed growth.

The BoJ said earlier this year it was aiming to hit a two-percent inflation target in as many years, but some analysts doubt the ambitious timeline given that recent price rises have been largely tied to Japan's soaring energy costs caused by the weaker yen.