Bank of Japan holds fire

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BoJ governor Haruhiko Kuroda Reuters. Bank of Japan Governor Haruhiko Kuroda looks for a reporter asking questions during a news conference at the BOJ headquarters in Tokyo, June 13, 2014. The Bank of Japan kept monetary policy steady on Friday and offered a slightly more upbeat view on overseas growth, signalling confidence the economy is on course to meet its inflation target next year without additional stimulus.

Tokyo - The Bank of Japan on Friday held off expanding its stimulus programme and said the world's number three economy was recovering, despite fears a sales tax rise will dent growth.

Policymakers unanimously agreed to hold off any further measures after a two-day meeting. Investors are now awaiting a statement by BoJ governor Haruhiko Kuroda at about 3:30 pm local time (08:30 SA time).

The widely expected move comes as the US Federal Reserve winds down its own stimulus and just over a week after the European Central Bank launched unprecedented easing measures to counter the threat of deflation in the eurozone.

Japanese central bankers have held steady since launching a huge monetary easing blitz in April last year as they gauge the impact of a recent sales tax hike that has threatened to derail the country's nascent recovery.

On Friday, the BoJ acknowledged that consumer demand and industrial production had taken a hit after the April 1 tax hike, prior to which millions of shoppers went on a buying spree.

“Japan's economy is expected to continue a moderate recovery as a trend, while it will be affected by the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike,” the bank said in a statement.

Policymakers noted that overseas economies, particularly among major industrialised nations, were also recovering “albeit with a lacklustre performance still seen in part”.

The BoJ's target of achieving 2.0 percent inflation by next year was also on course, it said. - Sapa-AFP



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