BOJ is keeping ammunition
The Bank of Japan maintained record easing, keeping a pledge to expand the monetary base at a pace of 60 trillion to 70 trillion yen ($677 billion) per year. The central bank lowered its view of exports and lifted its assessments of industrial output and investment.
The BOJ is keeping ammunition for future action as the April sales-tax increase from 5% to 8% (the first in 17 years) threatens to trigger the deepest one-quarter contraction since the March 2011 earthquake.
According to central bank’s governor Kuroda, there’s no need to change policy now as a positive economic cycle is continuing and growth will exceed potential even though it will rise and fall due to the tax increase. Downside risks in the global economy have been falling since last year, he said.