The Bank of Japan is expected to keep intact its large-scale monetary easing policy at its policy meeting next week and maintain its assessment of the domestic economy as it is recovering moderately, sources close to the matter said Friday.
At the two-day meeting starting Monday, the nine-member policy board is likely to discuss economic developments after the sales tax hike earlier this month amid concern that domestic demand may decrease in reaction to last-minute buying before the tax hike, though solid personal spending had been leading the nation's economic recovery.
The central bank forecasts sales of household goods to drop in April and sales for durable goods such as vehicles and electric appliances to decline from April to June, but the size of such falls are seen to be within the scope of its projection.
The BOJ, meanwhile, is likely to carefully assess developments of domestic demand, as a prolonged slump in consumer spending after the summer could have adverse impact on the economy.
In its assessment on the economy, the bank plans to include a description about the effects of the consumption tax on the economy, the sources said.
On monetary policy, the BOJ is likely to continue with its monetary easing steps to purchase ¥6 trillion to ¥8 trillion worth of government bonds in one month to pump money into financial markets to bolster the economy.