The Bank of Japan has kept monetary policy unchanged and offered its most optimistic assessment of the economy in nine years, signalling its confidence that a pick-up in overseas demand will help sustain an export-driven recovery. But as David Pollard reports, Governor Kuroda also signalled no change in policy just yet.
Just one word was enough to signal the Bank of Japan's at its most optimistic in almost a decade. Governer Kuroda talking of 'expansion ....' (SOUNDBITE) (Japanese) GOVERNOR OF BANK OF JAPAN, HARUHIKO KURODA, SAYING: "The economy's expansion will exceed our potential growth rate, supply will improve further, and wages will go up along with inflation." That key phrase was last used in March 2008. In March 2017, the economy did look better. Exports rising at their most in two years - manufacturing confidence at its best in almost ten. But there was also another signal. (SOUNDBITE) (Japanese) GOVERNOR OF BANK OF JAPAN, HARUHIKO KURODA, SAYING: "We have been saying inflation will accelerate toward 2 percent, but it's remained stagnant at zero percent. So talking about exit strategies now would confuse the market." In other words, it's too early to pull back on massive monetary stimulus yet. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "I think it's unlikely that they're going to see inflation above two per cent by 2019 as they're currently anticipating, which means more monetary stimulus for longer. Like I say, these are more long-standing, structural issues that are going to have to be addressed - things like wages are not growing." 'No change' at this meeting .... Kuroda in fact sticking to a pledge for 80 trillion yen of bond buying a year. The BoJ thought unlikely to ease back on stimulus until he serves out his term - this time next year.