Japan's economy "recovering moderately" says BoJ

The Bank of Japan has said the world's third-largest economy is "recovering moderately" and its board has voted unanimously to hold off on expanding its huge stimulus programme.

"Japan's economy is recovering moderately," it said in a statement. "Overseas economies as a whole are gradually heading toward a pick-up, although a lackluster performance is partly seen. In this situation, exports have generally been picking up. Business fixed investment is starting to pick up as corporate profits have improved. Public investment has continued to increase, and the pick-up in housing investment has become evident. Private consumption has remained resilient, with some improvement observed in the employment and income situation.

"Reflecting these developments in demand both at home and abroad, industrial production is increasing moderately. Meanwhile, financial conditions are accommodative. On the price front, the year-on-year rate of change in the consumer price index (CPI, all items less fresh food) is in the range of 0.5-1.0 percent. Inflation expectations appear to be rising on the whole."

With regard to the outlook, the BoJ said Japan's economy is "expected to continue a moderate recovery".

"The year-on-year rate of increase in the CPI is likely to rise gradually," it said.

The Bank said it "will continue with quantitative and qualitative monetary easing, aiming to achieve the price stability target of two percent, as long as it is necessary for maintaining that target in a stable manner."

The central bank's statement followed a two-day policy meeting.

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