The Bank of Japan has opted to maintain current levels of quantitative easing as inflation continues to move closer to the central bank’s inflation target.
Members of the central bank’s policy board voted unanimously to avoid changing its massive stimulus package and instead continue with current levels of monetary easing.
The Bank of Japan’s stimulus plan involves the expansion of the monetary base by an annual pace of around ¥60-70trn through a series of asset purchases.
Bank of Japan governor Haruhiko Kuroda believes this level of stimulus can continue to support economic improvement and rising inflation.
“Such conduct of monetary policy will support the positive movements in economic activity and financial markets, contribute to a rise in inflation expectations, and lead Japan’s economy to overcome the deflation that has lasted for nearly 15 years,” he said.
The central bank also expressed confidence that inflation will increase in line with expectations toward its inflation target of 2 per cent, with forecasts for 2014 predicting inflation will hit 1.3 per cent and 1.9 per cent the following year.