The Bank of Japan (BOJ) refrained from adding to unprecedented monetary stimulus as Governor Haruhiko Kuroda said the blow to the economy from last week’s sales-tax increase will fade during the summer.
The central bank will continue to expand the monetary base at a pace of 60 trillion yen to 70 trillion yen ($682 billion) per year, it said in a statement today in Tokyo, as forecast by all 36 economists in a Bloomberg News survey. At a press briefing, Kuroda said the BOJ would always adjust policy without hesitation as needed, including easing or tightening.
The economy is forecast to shrink an annualized 3.5 percent in the three months from April, breaking a projected six straight quarters of growth, according to a separate Bloomberg survey of economists.
The economy has continued to recover moderately, “albeit with some fluctuations due to the consumption tax hike,” the BOJ said in its statement.