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 has the economy continuing its moderate recovery with virtuous cycle from income to spending operating. Exports have been on an increasing trend in line with growth in oversea economies. Corporate profits and business fixed investment have been positive. Consumption has strengthened with improvement in employment and income while public investment and housing investment have been flat.

Inflation (all items less fresh food) is around 0.5 per cent and inflation expectations remain in a weakening phase. Consumer prices are expected to continue an uptrend and increase towards 2 per cent as the output gap closes and medium-term inflation expectations increase.

Source: Bank of Japan's Statement on Monetary Policy