(MENAFN- AFP) Japan's central bank pressed ahead with its ultra-loose monetary policy Thursday on the back of an improving economy, as its overseas counterparts start to turn off the stimulus taps.
The Bank of Japan held steady following its latest two-day policy meeting, as the world's third biggest economy enjoys its longest spell of growth in more than a decade.
"Japan's economy is likely to continue its moderate expansion," the bank said in a statement after its 8-1 decision to leave its asset-buying plan and negative interest rate policy in place.
All eyes are now on BoJ governor Haruhiko Kuroda's comments to reporters later Thursday to see if he hints at a timeline for easing off the bank's record stimulus plan.
The BoJ's widely expected decision came a day after the US central bank said it would start to wind down its crisis-era stimulus and hinted at another rate hike by the end of the year.
Markets are also keeping a close eye on the European Central Bank for clues as to when it will start to take its foot off the stimulus pedal and raise borrowing costs.
Japan's central bank pointed to the country's improving prospects Thursday, after earlier figures showed the economy grew 0.6 percent in the second quarter -- capping off six straight quarters of gains, the best in over a decade.
The growth has been driven mainly by surging exports including smartphone parts and memory chips, as well as investments linked to the Tokyo 2020 Olympics.
The BoJ raised its growth outlook for the economy at its July meeting.
But it also slashed its annual inflation forecast and once again delayed its timetable for hitting its two-percent price target to sometime in the year to March 2020, about five years later than planned and underscoring the challenge in slaying years of on-off deflation.
Officials had originally set in 2013 a two-year timeline when unveiling the bank's massive asset buying programme as part of Prime Minister Shinzo Abe's push to kickstart Japan's once-booming economy, dubbed "Abenomics".
Tokyo's years-long effort to kickstart growth -- a blend of massive monetary easing, government spending and red-tape slashing -- stoked a stock market rally, weakened the yen and fattened corporate profits.
But the economy was unable to gain a firm footing until recently. And while Japan's job market is tight, individual spending -- which accounts for more than a half of the country's gross domestic product -- has struggled to pick up.
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