Bank of Japan sticks with stimulus pace in upbeat economic view

The Bank of Japan maintained its massive stimulus programme and its upbeat assessment of the economy on Friday, signalling its conviction that growth will strengthen enough to accelerate inflation to its 2 per cent target without more monetary easing.

With business sentiment improving and capital expenditure picking up, the BOJ maintained its rosy assessment that the economy continues to recover.

As widely expected, the central bank also kept intact its pledge to increase base money at an annual pace of 80 trillion yen (HK$5.04 billion) through aggressive asset purchases. The decision was made by an 8-1 vote.

BOJ governor Haruhiko Kuroda said companies were increasingly diverting their strong profits into capital expenditure and wages, underpinning the economic recovery.

“Exports are picking up and will improve gradually due to an expected recovery in the overseas economy and support from a weak yen,” Kuroda told a news conference.

The BOJ also revised up its view on housing investment to say it “appeared to be picking up”. Last month, it said housing investment was bottoming out with some signs of a pick-up.