The Bank of Japan said Thursday it will keep its radical quantitative easing policy in place and leave its previous description of the economic recovery intact despite slowing growth in exports.
The central bank’s nine-member Policy Board wrapped up its two-day meeting with a unanimous decision to continue the unorthodox monetary easing policy it launched in April. The goal is to double the nation’s monetary base and aggressively ramp up purchases of government bonds to artificially stoke 2 percent inflation in two years and put an end to chronic deflation.
The economy still appears to be “recovering moderately” on a path toward overcoming deflation, because consumer prices are rising steadily and domestic demand remains solid, due partly to robust public works investment, the central bank said in a statement, citing the exports and capital investment amid an improvement in corporate earnings. It also kept the view that public investment and housing investment have increased.
On private consumption, the BOJ said it has “remained resilient,” with some improvement seen in the employment and income situations.
Regarding overseas economies, the BOJ said they are “picking up moderately” as a whole, although a lackluster performance is partly seen.
On the outlook, the BOJ said the world’s third-largest economy “is expected to continue a moderate recovery,” while noting it still faces “a high degree of uncertainty,” including the outlook for the European debt problem, developments in emerging economies and the pace of recovery in the U.S.
The government said earlier this month that Japan’s economy slowed to annualized real growth of 1.9 percent in the July-September period, following a 3.8 percent expansion the previous quarter, as consumer spending stalled and external demand shrank against the backdrop of a downturn in some emerging economies.