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The Bank of Japan refrained Friday from expanding monetary stimulus as Gov. Haruhiko Kuroda bets the world’s third-biggest economy will emerge from a recent soft patch and inflation will pick up.

The central bank will keep increasing the monetary base at an annual pace of ¥80 trillion ($640 billion).

BOJ officials are assessing the strength of a rebound from what Goldman Sachs Group Inc. and JPMorgan Chase & Co. estimate to be the first contraction since the economy took a dive last year after a sales-tax hike. While Kuroda sees last quarter’s weakness as temporary, high inventories and a slowdown in China are risks to achieving his 2 percent inflation target.

“Unless inflation gains a bit more momentum, it’ll get harder for the BOJ to reach its goal within its time frame,” said Maiko Noguchi, an economist at Daiwa Securities Group Inc. and a former official at the central bank.

Daiwa Institute of Research estimates the economy shrank as much as an annualized 3.3 percent in the three months through June, ending two quarters of expansion.

Kuroda said on July 15 that he didn’t think “at all” that weakness last quarter will continue, and reiterated his view that inflation will reach 2 percent around the six months through September 2016.

Housing investment has been picking up, the BOJ said in its statement, a slightly more upbeat view than last month.

The BOJ sees the economy rebounding this quarter after a temporary slowdown in the three months through June, said Masaki Kuwahara, an economist at Nomura Securities Co.

“Their economic view basically hasn’t changed,” said Kuwahara.

The central bank has been highlighting indicators showing inflation pressures building. One gauge which strips out fresh food as well as energy costs that have steamrolled its main measure to near 0 percent showed inflation picking up to 0.7 percent in May. The BOJ made a splash last month by featuring that alternative index in a monthly report for the first time.

Some officials see gains in the BOJ’s main measure accelerating to around 1 percent by December from 0.1 percent in June as the damping effects from oil start to fade from around October, people familiar with the matter said recently.

Reaching the 2 percent inflation target by September next year could be at risk if weakness persists, the people said.

Just one economist said inflation would reach the 2 percent goal around the April-September 2016 window predicted by Kuroda. Twenty-one predict an eventual boost in stimulus.

The economy is showing signs of strain. Exports dropped in the second quarter, the most since late 2012, according to data from the BOJ. Retail sales fell in June for the third time this year, and while industrial output increased more than forecast, inventories rose to the highest level since 2009, raising the risk that manufacturers curtail production in coming months.

Fast Retailing Co., Asia’s biggest clothing seller, this week signaled weakness in July, saying sales at its Uniqlo stores slid 1.5 percent from a year earlier as the rainy season pushed down temperatures.

Renewed declines in oil prices, which fell to six-month lows this week, could be a concern for the central bank. While Kuroda has said that cheaper gasoline prices will spur growth by boosting household spending power, the depressing effect on inflation expectations was a factor the BOJ cited last October when it expanded its asset purchase plan.

“It’s difficult for inflation to rise to more than 1 percent,” said Masaaki Kanno, an economist at JPMorgan Chase & Co. and a former BOJ official. “The BOJ may cite oil prices for a reason of additional easing.”

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