Bank of Japan holds off fresh stimulus, says economy recovering

Friday 08 August 2014 07.35
Bank of Japan says the world's third biggest economy continues its recovery
Bank of Japan says the world's third biggest economy continues its recovery

The Bank of Japan today held fire on expanding its vast stimulus programme, saying the world's third biggest economy continued to recover, even as the country's export picture worsened. 

The decision was widely expected. 

Policymakers issued their unanimous decision as questions grow about whether they would launch further monetary easing measures after Tokyo hiked sales taxes in April, dragging on growth as consumer spending took a hit.

Bank of Japan governor Haruhiko Kuroda, however, has said the impact of the levy hike has not as bad as expected.

He has pledged to take further action if necessary, after the bank last year launched unprecedented measures as part of a wider bit to stimulate the long laggard economy.

Today's statement from the bank pointed to a decline in exports and said factory output "has shown some weakness", while the jobs and wage growth was "improving steadily".

"Japan's economy has continued to recover moderately as a trend, although the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed," it said, a repeat of what it said at last month's meeting.

Many economists still believe the Bank of Japan will expand its monetary base this year.