(MENAFN- AFP) The Bank of Japan on Friday held fire on more stimulus as it pointed to a pick-up in the economy, despite flat-lining inflation that has defied a two-year-old monetary easing programme.
In a widely expected decision, the central bank said it would stand pat on a record 80 trillion yen ($650 billion) annual asset-buying scheme that is aimed at jacking up prices and kickstarting growth.
The bank also said it would move to improve its communication by issuing more frequent and detailed reports on its outlook for the economy and prices, while cutting the number of policy meetings to eight from the current 14 a year.
Traders are now waiting for a regular news briefing from BoJ chief Haruhiko Kuroda, whose comments last week about the weakness of the yen sparked a short-lived surge in the currency. He later backtracked on those comments.
While the yen's sharp decline has been good news for Japanese exporters, it has pushed up the cost of imports and eroded consumers' purchasing power.
In Friday forex trading, the dollar bought 122.99 yen, little changed from before Friday's statement and slightly stronger than 122.93 yen in New York.
"Japan's economy has continued to recover moderately," the BoJ said Friday following its two-day meeting.
Policymakers pointed to an improvement in exports, factory output and capital spending, as Tokyo pushes companies to hike wages in a bid to stimulate consumer spending, after a sales tax rise last year pushed Japan into a brief recession.
"Against the background of steady improvement in the employment and income situation, private consumption has been resilient and housing investment has started to pick up," the bank said.
Economists expect a further loosening of monetary policy, likely later this year, to bring Japan closer to its two-percent inflation target, which is a cornerstone of Prime Minister Shinzo Abe's drive to conquer years of deflation.
The country's near-zero inflation rate is far below the BoJ's target.
Earlier this week, Japan reported a sharp drop in its May trade deficit, but still-lacklustre shipments overseas failed to offset a fall in energy imports.
In the first quarter of 2015, Japan's economy grew 1.0 percent, or 3.9 percent on an annualised basis.
But there was still concern about the health of the economy, particularly that weak demand overseas could drag on factory output as manufacturers try to cut an inventory build-up that boosted growth in the first three months of the year.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.