The Bank of Japan on Thursday maintained its ultraloose monetary policy introduced in April and left unchanged its assessment of the national economy that it is “starting to recover moderately,” after upgrading the view for seven consecutive months.
On Japan’s consumer prices that turned higher in June for the first time in one year and two months, the central bank said the size of the year-on-year increase in the index is likely to expand gradually. The BOJ is aiming to achieve an inflation target of 2 percent in about two years.
“Inflation expectations appear to be rising on the whole,” the BOJ said in a statement, revising its previous expression that some indicators suggest a rise in inflation expectations.
In June, the consumer price index excluding fresh food marked a 0.4 percent increase from a year earlier on higher energy prices amid a weaker yen. Some other economic data point to Japan’s economic recovery, with department store sales increasing 7.2 percent in June from a year earlier.
The jobless rate improved to 3.9 percent in June, falling below 4 percent for the first time in four years and eight months.
But the BOJ apparently refrained from upgrading its economic assessment as a recovery in basic wages remains sluggish despite resilience in consumer spending, while a pickup in corporate investment seemed not strong enough to upgrade the view.
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