The Bank of Japan refrained from adding to unprecedented monetary stimulus after business confidence surged and Prime Minister Shinzo Abe decided the economy was strong enough to weather a sales-tax increase.
Governor Haruhiko Kuroda’s board retained a goal of expanding the monetary base by 60 trillion to 70 trillion yen ($720 billion) a year, the central bank said in Tokyo today. Thirty-five of 36 economists in a Bloomberg News survey forecast no change in policy, while one predicted more purchases of real-estate investment trusts.
Kuroda and his officials will monitor the risk that a 5 trillion yen fiscal package announced this week won’t be enough to offset the blow to consumption and economic growth from the tax increase set for April. Most economists predict additional stimulus in the first half of next year as Abe and the BOJ try to catapult the nation out of 15 years of deflation.
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