The Bank of Japan keeps monetary policy steady and upgrades its assessment of consumption and overseas growth, signalling confidence that an export-driven recovery is gaining momentum. David Pollard reports.
The long march back to recovery .... For Japan, it's been slow progress amid weak consumer demand. But that is picking up its pace, according to Huruhiko Kuroda. If not quickly enough yet to justify any change in monetary policy. (SOUNDBITE) (Japanese) BANK OF JAPAN GOVERNOR, HARUHIKO KURODA, SAYING: "There's some distance to achieving 2 percent inflation." Rates left on hold - and a pledge to keep increasing its bond holdings at an annual pace of 80 trillion yen, unchanged. With no hint of any move towards tapering its stimulus programme. (SOUNDBITE) (Japanese) BANK OF JAPAN GOVERNOR, HARUHIKO KURODA, SAYING: "Laying out specific simulations on our exit strategy now is not appropriate as it would only create confusion." (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "Inflation unfortunately is stuck at 0.4 per cent. And while they've stuck with the guidance that they expect - inflation, CPI to be back up to two per cent by fiscal year 2018 - I don't think anybody in the market, myself included, believes that." But the BoJ also sees overseas economies continuing to expand. Good news for Japan's export-led pick-up. If inflation still remains the bad ... Business still cautious of raising prices - for fear of scaring away the very consumption the economy needs.