The Policy Board of the Bank of Japan decided to leave monetary policy unchanged after the introduction of their Quantitative and Qualitative Easing with Yield Curve Control policy last year. The Bank of Japan will continue to apply a -0.1 per cent to Policy-Rate Balances for current accounts held by the Bank and they will purchase government bonds to keep the 10-year yield around zero per cent. Purchases for Japanese government bonds will be around 80 trillion yen per year and the Bank will continue purchasing exchange-traded funds at 6 trillion yen per year and real estate investment trusts at 90 billion yen per year. Commercial paper and corporate bond holdings by the Bank will be maintained.

A summary of the Bank of Japan's Outlook for Economic Activity has the economy continuing its moderate recovery. Exports have picked up as overseas economies grow at moderate paces even as emerging economies remain sluggish. Business fixed investment has been trending upward as corporate profits have improved. Private consumption has been resilient with improvements in employment and income. Housing and public investment are flat. Financial conditions remain highly accommodative. Risks to the outlook include developments in the US economy and the impact US monetary policy will have on global financial markets, evolution of developments in China, and the European debt problem. 

The consumer price inflation rate is likely to increase from current 0 per cent and become positive as energy prices rise. Afterwards progress is expected towards 2 per cent as the output gap improves and medium term inflation expectations rise.

Source: Bank of Japan's Statement on Monetary Policy