Bank of Japan Optimistic About Economy for First Time in Two Years

The Bank of Japan on Thursday lifted its assessment of the Japanese economy for the seventh consecutive month and stated it is “starting to recover moderately,” using the word “recover” for the first time in two and a half years amid an improvement in corporate sentiment and solid consumer spending.

The central bank last used the term to describe the state of the economy in January 2011, two months before a devastating earthquake struck northeastern Japan. At a two-day policy meeting through Thursday, the BOJ also maintained its target of achieving inflation of around 2 percent in two years to beat the deflation that has lasted for nearly two decades.

Following the meeting, the nine-member Policy Board decided unanimously to maintain its aggressive monetary easing policy introduced in April, centering on doubling the monetary base and boosting purchases of government bonds.

In an interim review of the BOJ’s semiannual outlook report issued in late April, the country’s economic growth projection for the current fiscal year through next March was revised down from 2.9 percent to 2.8 percent.

For the price outlook, the BOJ stuck to its view that the country’s consumer price index will post a year-on-year rise of 1.9 percent in fiscal 2015, almost achieving its target of 2 percent inflation in about two years.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza