Japan's central bank maintains monetary policy, economic assessment

The bank of Japan (BOJ) on Thursday decided to keep its current monetary policy, clinging to the judgment that the economy is "recovering moderately" despite recent data showing Japan has slipped into recession.

Following a two-day policy meeting, the nine-member Policy Board of the central bank decided to keep the current monetary policy of increasing base money at an annual pace of around 80 trillion yen (about 648.16 billion U.S, dollars) with an eight to one vote.

The bank also maintained its previous assessment of the economy, saying the economy is "recovering moderately" despite the government data showing that Japan has slipped into recession, as recession is usually defined as two consecutive quarters of contraction.

Japan's economy contracted an annualized 0.8 percent in the July-September quarter of 2015 after a revised 0.7 percent fall in the April-June quarter, according to government data released last Monday.

The BOJ Governor Haruhiko Kuroda attributed the contraction mainly to the decline in inventory investment, and said the economy would continue to recover moderately, as final demand is increasing as a whole with exports picking up and personal consumption solid due to rising wages.

He also expressed positive view about achieving the inflation target of 2 percent in the second half of fiscal 2016.

Attributing the recent fall of consumer prices to lower energy prices, the BOJ judged that the trend of rising prices remained on course, and expected the inflation to pick up next year as the effects of lower crude oil prices receded.

In the previous meeting on Oct. 30, the bank pushed back the target date of achieving the 2 percent inflation goal to the second half of fiscal 2016 ending March 2017, from the first half of fiscal 2016 expected earlier.

"The BOJ will examine both upside, downside risks to economy and prices, and adjust policy as appropriate", said Kuroda.

The BOJ's next policy meeting will be on Dec. 17-18, just after the U.S.Federal Reserve ends a two-day gathering on Dec 16. Minutes of a Federal Reserve meeting released recently showed broad support among policymakers in United States for an interest rate hike in December.