TOKYO: The Bank of Japan held off further easing measures on Wednesday as it struggles to drag up the country’s flatlining inflation that is defying a massive stimulus programme launched two years ago.
The central bank stayed pat on its record stimulus programme, which is adding about 80 trillion yen ($663 billion) to the money supply every year.
After a two-day meeting, the BoJ said in a statement consumer inflation was likely to be about zero “for the time being” due to lower energy prices.
However, it added “inflation expectations appear to be rising on the whole from a somewhat longer-term perspective”.
The phrasing is identical to the outlook offered in the statement after the bank’s March meeting.
The yen picked up on the news — soon after the bank’s statement the dollar was at 120.06 yen compared with 120.32 yen in New York on Tuesday.
The bank also kept unchanged its overall opinion of the economy as Tokyo attempts to kickstart growth in the world’s third largest economy after years of falling or stagnant prices.
“Japan’s economy is expected to continue its moderate recovery trend,” with demand both at home and abroad picking up, it said.
The price trend is a far cry from the bank’s goal of a sustained two percent inflation level, and has spawned speculation that the bank will this year add to the stimulus measures it launched in April 2013.
BoJ governor Haruhiko Kuroda has repeatedly said the bank would further loosen monetary policy if necessary and in October it surprised markets by expanding the scheme earlier than expected.
Tokyo’s campaign to stimulate spending faltered after the government raised the country’s sales tax last year to help pay down Japan’s enormous national debt.