The Bank of Japan downgraded slightly its assessment of the economy for the third consecutive month Wednesday, admitting that the likelihood of a recovery by the end of the year is fading.

The assessment was used at the BOJ’s two-day Policy Board meeting that ended Tuesday, during which the central bank decided to further ease monetary policy.

In general, most believe that signs of a global economic recovery will surface around the end of the year, and that exports will pick up “some time in the future,” the BOJ said in the monthly report.

“However, cautious views on global demand in IT-related goods and developments in overseas economies for both their timing and pace of recovery are recently growing.”

The report also says that household income is likely to weaken gradually along with falls in corporate profits.

“Adjustments in economic activities are intensifying further, reflecting a substantial decline in exports and production.”

Economists say that translates into worsened economic conditions.

The report points to new declines in public investment and says net exports continue to fall, reflecting both a slowdown in overseas economies and sluggish demand for information technology-related goods.

More money flowing

The Bank of Japan began pumping more money into the banking system Wednesday in hopes that the funds will translate into more loans and stimulate the economy.

The central bank printed more money to buy up 200 billion yen in government bonds in the market following its decision to loosen its already ultra-easy monetary policy the previous day.

The BOJ intends to step up bond purchases to total 600 billion yen by the end of the month.

Wednesday’s operations boosted banks’ reserves held at the BOJ from 5 trillion yen to around 5.7 trillion yen. BOJ officials said there should be no trouble reaching the 6 trillion yen goal.

In textbook economics the step should lead to a boost in the amount of money circulating in the economy. But analysts voiced doubt that the extra money would make its way from banks to corporations, who are trying to cut back on spending.

The sudden surplus funds meanwhile kept interest rates between banks firmly planted at 0.01 percent. This rate ultimately determines interest rates banks charge companies and individuals.

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