Japan keeps easy credit stance

TOKYO (AP) – Japan's central bank opted Thursday to keep its ultra-lax monetary policy unchanged, saying rising private consumption, exports and business investment were signs that a moderate recovery has taken hold.

In a policy statement, the Bank of Japan (BOJ) said it is committed to its nearly five-year-old 2 percent inflation target, but deemed inflation expectations to be in a “weakening phase.'' It forecast that inflation would likely gradually rise thanks to tightening capacity.

“Industrial production has been on an increasing trend, and labor market conditions have continued to tighten steadily,'' the statement said.

The central bank kept its key policy rate at minus 0.1 percent.

BOJ Gov. Haruhiko Kuroda launched his big “bazooka'' of stimulus in early 2013, seeking to push prices higher, and encourage wages and investment to rise, through massive central bank purchases of Japanese government bonds and other assets that are pumping hundreds of billions of dollars into the economy each year.

By vanquishing deflation, or falling prices, the aim was to get businesses and consumers to spend more sooner, to get more purchasing power out of their money. But wages have failed to rise as much as expected, and corporations have opted to hoard record profits, building up massive cash piles or making investments in overseas markets that are growing faster than Japan's.

A recovery of demand in China and other major markets for Japan is helping push exports higher, giving the economy a boost as unemployment has dropped to its lowest level in decades.