Japan's central bank said the economic recovery is underway, maintaining the stability of monetary policy on Thursday, the most optimistic view reflects the weakness of the yen and the massive positive impact of monetary stimulus activities in two and half years.
No significant change in the central bank forecast the consumer price index will accelerate in the coming years to nearly 2% of the business year ended in March 2016, Prime Minister Shinzo Abe (Shinzo Abe) drive on a key objective to revitalize the economy.
As widely expected, the Bank of Japan voted unanimously to maintain its commitment to increase the monetary base, or in the central bank's cash and deposits, an annual 60 to 70 trillion yen (60 billion to 70 billion U.S. dollars) pace.
"Japan's economy began a modest recovery," the central bank said in a statement: The two-day meeting, the seventh consecutive month raised its assessment.
The last time the central bank used the word "recovery" to describe the economy was in January 2011, two months before the March 11 earthquake and tsunami-ravaged country.
Many central bankers to encourage bright signs in the economy, the yen to support exports and the feel-good mood generated by Abe reflation policy to consolidate consumer spending and business confidence fell to multi-year lows.
The Bank of Japan said that capital expenditure has stopped weakened, showing some signs of recovery, but also upgraded its view of factory output, said it was "moderate growth."
Thursday's data support this view, the core machinery orders, a leading indicator of capital spending, rose 10.5 percent in May fell more than expected.
Bank of Japan's optimism hinted that it may hold any additional stimulus, at least until late October, when the overhaul of its economic and price forecasts, analysts said.
"There is no significant change in the Bank of Japan from April forecasts, basically, the economy is recovering, in line with its main scene, said:" Yasuo Yamamoto, senior economist in Tokyo Mizuho Research Institute.
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Figure: Japan's core inflation rate and the CGPI
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Figure: core inflation and central bank policy rates
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Figure: Japan's inflation target
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Ambitious goals
Concerns about recent financial market sell-off, the U.S. Federal Reserve may start to reduce its 85 billion dollar a month bond-buying program as soon as September.
This timetable was thrown into question after Fed Chairman Ben Bernanke said Wednesday it will require highly accommodative monetary policy in the foreseeable future.
Market volatility, there is little impact on the Japanese economy since the end of last year the economy emerges from recession in the first quarter annualized growth rate of 4.1%.
Tuesday, the International Monetary Fund (IMF) raised its growth forecast for Japan to 2% this year, the central bank stimulus, its strongest predictor of the back of the G7 countries.
Bank of Japan board slightly lowered its core consumer inflation expectations of 0.6% in the value of the business year to March 2014, from the April forecast of 0.7%, probably due to the impact of falling commodity prices.
Also adjusted its core consumer inflation rate increased from 1.4 to 1.3 percent, the forecast for the following year, but remained at 1.9%, with an estimated 2015/16 financial year remain unchanged.
Projection is still higher than about 1% of private sector forecasts more ambitious mark many analysts suspect that there may be a quick exit from 15 years of deflation.
Yamamoto Mizuho Research Institute, said the Bank of Japan's price projections were too optimistic, after concerns about a possible decline in demand is expected next year in April in Japan sales tax hike.
"The Bank of Japan may again early next year, downside risks to its target price is likely to become more clear," he said.
 
 



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