Bank of Japan holds fire on stimulus

TOKYO: The Bank of Japan on Friday held fire on launching more stimulus, days after official data showed the world´s number three economy grew more than expected in the first quarter.
Policymakers kept the central bank´s annual 80 trillion yen ($662 billion) monetary easing programme in place after a two-day meeting and investors will now be watching a briefing by governor Haruhiko Kuroda later in the day.
On Wednesday the government released figures showing Japan´s economy, which sank into a brief recession last year, expanded by a better-than-expected 0.6 percent from the previous quarter. In annualised terms, growth was 2.4 percent between January-March — well ahead of disappointing 0.2 percent growth in the US economy — as capital spending and the housing market showed signs of strength, although exports dipped slightly and consumer spending was weak. Kuroda has been forced to push back a timeline for hitting a 2.0 percent inflation target — a cornerstone of Prime Minister Shinzo Abe´s plan to kickstart the deflation-plagued economy — although he insists that price rises are around the corner. Stripping out the impact of a sales tax rise last year, Japan´s inflation rate in March came in at a tepid 0.2 percent from a year ago, well short of the BoJ´s target.