Bank of Japan holds off new stimulus

The Bank of Japan on Thursday kept its policy steady, saying the economy has been recovering despite some weakness caused by April’s consumption tax increase.

The central bank will continue its massive asset purchases from financial institutions to flood the economy with more money and raise the nation's inflation rate to 2%, it said after the Policy Board ended a two-day meeting. The decision by the nine-member body was unanimous.

The Japanese economy "has continued to recover moderately as a trend," the BoJ said in a statement, maintaining its previous assessment.

The BoJ said private consumption weakened since the April 1 sales tax hike, but also underscored that it "has remained resilient" amid improving employment and income conditions. The negative effects of the tax rise "have gradually begun to wane."

Last month, the BoJ downgraded its views on exports and production. On Thursday, it continued saying, "exports have shown some weakness," and that industrial output "has recently shown some weakness."

The bank said its aggressive monetary easing, introduced in April 2013, "has been exerting its intended effects" and will be in place until the inflation target is reached and maintained in a stable manner.

The economy "is expected to continue its moderate recovery trend" with the tax-hike impact gradually diminishing, the BoJ said.

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